Standard of Practice 16-1
Article 16 is not intended to prohibit aggressive or innovative business practices which
are otherwise ethical and does not prohibit disagreements with other RealtorsŪ involving
commission, fees, compensation or other forms of payment or expenses. (Adopted 1/93,
Amended 1/95)
Standard of Practice 16-2
Article 16 does not preclude RealtorsŪ from making general announcements to prospective
clients describing their services and the terms of their availability even though some
recipients may have entered into agency agreements or other exclusive relationships with
another RealtorŪ. A general telephone canvass, general mailing or distribution addressed
to all prospective clients in a given geographical area or in a given profession,
business, club, or organization, or other classification or group is deemed
"general" for purposes of this standard. (Amended 1/98)
Article 16 is intended to recognize as
unethical two basic types of solicitations:
First, telephone or personal
solicitations of property owners who have been identified by a real estate sign, multiple
listing compilation, or other information service as having exclusively listed their
property with another RealtorŪ; and
Second, mail or other forms of written
solicitations of prospective clients whose properties are exclusively listed with another
RealtorŪ when such solicitations are not part of a general mailing but are directed
specifically to property owners identified through compilations of current listings,
"for sale" or "for rent" signs, or other sources of information
required by Article 3 and Multiple Listing Service rules to be made available to other
RealtorsŪ under offers of subagency or cooperation. (Amended 1/93)
Standard of Practice 16-3
Article 16 does not preclude RealtorsŪ from contacting the client of another broker for
the purpose of offering to provide, or entering into a contract to provide, a different
type of real estate service unrelated to the type of service currently being provided
(e.g., property management as opposed to brokerage). However, information received through
a Multiple Listing Service or any other offer of cooperation may not be used to target
clients of other RealtorsŪ to whom such offers to provide services may be made. (Amended
1/93)
Standard of Practice 16-4
RealtorsŪ shall not solicit a listing which is currently listed exclusively with another
broker. However, if the listing broker, when asked by the RealtorŪ, refuses to disclose
the expiration date and nature of such listing; i.e., an exclusive right to sell, an
exclusive agency, open listing, or other form of contractual agreement between the listing
broker and the client, the RealtorŪ may contact the owner to secure such information and
may discuss the terms upon which the RealtorŪ might take a future listing or,
alternatively, may take a listing to become effective upon expiration of any existing
exclusive listing. (Amended 1/94)
Standard of Practice 16-5
RealtorsŪ shall not solicit buyer/tenant agreements from buyers/tenants who are subject
to exclusive buyer/tenant agreements. However, if asked by a RealtorŪ, the broker refuses
to disclose the expiration date of the exclusive buyer/tenant agreement, the RealtorŪ may
contact the buyer/tenant to secure such information and may discuss the terms upon which
the RealtorŪ might enter into a future buyer/tenant agreement or, alternatively, may
enter into a buyer/tenant agreement to become effective upon the expiration of any
existing exclusive buyer/tenant agreement. (Adopted 1/94, Amended 1/98)
Standard of Practice 16-6
When RealtorsŪ are contacted by the client of another RealtorŪ regarding the creation of
an exclusive relationship to provide the same type of service, and RealtorsŪ have not
directly or indirectly initiated such discussions, they may discuss the terms upon which
they might enter into a future agreement or, alternatively, may enter into an agreement
which becomes effective upon expiration of any existing exclusive agreement. (Amended
1/98)
Standard of Practice 16-7
The fact that a client has retained a RealtorŪ as an agent or in another exclusive
relationship in one or more past transactions does not preclude other RealtorsŪ from
seeking such former client's future business. (Amended 1/98)
Standard of Practice 16-8
The fact that an exclusive agreement has been entered into with a RealtorŪ shall not
preclude or inhibit any other RealtorŪ from entering into a similar agreement after the
expiration of the prior agreement. (Amended 1/98)
Standard of Practice 16-9
RealtorsŪ, prior to entering into an agency agreement or other exclusive relationship,
have an affirmative obligation to make reasonable efforts to determine whether the client
is subject to a current, valid exclusive agreement to provide the same type of real estate
service. (Amended 1/98)
Standard of Practice 16-10
RealtorsŪ, acting as agents of, or in another relationship with, buyers or tenants, shall
disclose that relationship to the seller/landlord's agent or broker at first contact and
shall provide written confirmation of that disclosure to the seller/landlord's agent or
broker not later than execution of a purchase agreement or lease. (Amended 1/98)
Standard of Practice 16-11
On unlisted property, RealtorsŪ acting as buyer/tenant agents or brokers shall disclose
that relationship to the seller/landlord at first contact for that client and shall
provide written confirmation of such disclosure to the seller/landlord not later than
execution of any purchase or lease agreement.
RealtorsŪ shall make any request for
anticipated compensation from the seller/landlord at first contact. (Amended 1/98)
Standard of Practice 16-12
RealtorsŪ, acting as agents or brokers of sellers/landlords or as subagents of listing
brokers, shall disclose that relationship to buyers/tenants as soon as practicable and
shall provide written confirmation of such disclosure to buyers/tenants not later than
execution of any purchase or lease agreement. (Amended 1/98)
Standard of Practice 16-13
All dealings concerning property exclusively listed, or with buyer/tenants who are subject
to an exclusive agreement shall be carried on with the client's agent or broker, and not
with the client, except with the consent of the client's agent or broker or except where
such dealings are initiated by the client. (Adopted 1/93, Amended 1/98)
Standard of Practice 16-14
RealtorsŪ are free to enter into contractual relationships or to negotiate with
sellers/landlords, buyers/tenants or others who are not subject to an exclusive agreement
but shall not knowingly obligate them to pay more than one commission except with their
informed consent. (Amended 1/98)
Standard of Practice 16-15
In cooperative transactions RealtorsŪ shall compensate cooperating RealtorsŪ (principal
brokers) and shall not compensate nor offer to compensate, directly or indirectly, any of
the sales licensees employed by or affiliated with other RealtorsŪ without the prior
express knowledge and consent of the cooperating broker.
Standard of Practice 16-16
RealtorsŪ, acting as subagents or buyer/tenant agents or brokers, shall not use the terms
of an offer to purchase/lease to attempt to modify the listing broker's offer of
compensation to subagents or buyer's agents or brokers nor make the submission of an
executed offer to purchase/lease contingent on the listing broker's agreement to modify
the offer of compensation. (Amended 1/98)
Standard of Practice 16-17
RealtorsŪ acting as subagents or as buyer/tenant agents or brokers, shall not attempt to
extend a listing broker's offer of cooperation and/or compensation to other brokers
without the consent of the listing broker. (Amended 1/98)
Standard of Practice 16-18
RealtorsŪ shall not use information obtained by them from the listing broker, through
offers to cooperate received through Multiple Listing Services or other sources authorized
by the listing broker, for the purpose of creating a referral prospect to a third broker,
or for creating a buyer/tenant prospect unless such use is authorized by the listing
broker. (Amended 1/93)
Standard of Practice 16-19
Signs giving notice of property for sale, rent, lease, or exchange shall not be placed on
property without consent of the seller/landlord. (Amended 1/93)
Standard of Practice 16-20
RealtorsŪ, prior to or after terminating their relationship with their current firm,
shall not induce clients of their current firm to cancel exclusive contractual agreements
between the client and that firm. This does not preclude RealtorsŪ (principals) from
establishing agreements with their associated licensees governing assignability of
exclusive agreements. (Adopted 1/98)
Standard of Practice 17-1
The filing of litigation and refusal to withdraw from it by RealtorsŪ in an arbitrable
matter constitutes a refusal to arbitrate. (Adopted 2/86)
Standard of Practice 17-2
Article 17 does not require RealtorsŪ to arbitrate in those circumstances when all
parties to the dispute advise the Board in writing that they choose not to arbitrate
before the Board. (Amended 1/93)
Standard of Practice 17-3
RealtorsŪ, when acting solely as principals in a real estate transaction, are not
obligated to arbitrate disputes with other RealtorsŪ absent a specific written agreement
to the contrary. (Adopted 1/96)
Standard of Practice 17-4
Specific non-contractual disputes that are subject to arbitration pursuant to Article 17
are:
1) Where a listing broker has
compensated a cooperating broker and another cooperating broker subsequently claims to be
the procuring cause of the sale or lease. In such cases the complainant may name the first
cooperating broker as respondent and arbitration may proceed without the listing broker
being named as a respondent. Alternatively, if the complaint is brought against the
listing broker, the listing broker may name the first cooperating broker as a third-party
respondent. In either instance the decision of the hearing panel as to procuring cause
shall be conclusive with respect to all current or subsequent claims of the parties for
compensation arising out of the underlying cooperative transaction. (Adopted 1/97)
2) Where a buyer or tenant
representative is compensated by the seller or landlord, and not by the listing broker,
and the listing broker, as a result, reduces the commission owed by the seller or landlord
and, subsequent to such actions, another cooperating broker claims to be the procuring
cause of sale or lease. In such cases the complainant may name the first cooperating
broker as respondent and arbitration may proceed without the listing broker being named as
a respondent. Alternatively, if the complaint is brought against the listing broker, the
listing broker may name the first cooperating broker as a third-party respondent. In
either instance the decision of the hearing panel as to procuring cause shall be
conclusive with respect to all current or subsequent claims of the parties for
compensation arising out of the underlying cooperative transaction. (Adopted 1/97)
3) Where a buyer or tenant
representative is compensated by the buyer or tenant and, as a result, the listing broker
reduces the commission owed by the seller or landlord and, subsequent to such actions,
another cooperating broker claims to be the procuring cause of sale or lease. In such
cases the complainant may name the first cooperating broker as respondent and arbitration
may proceed without the listing broker being named as a respondent. Alternatively, if the
complaint is brought against the listing broker, the listing broker may name the first
cooperating broker as a third-party respondent. In either instance the decision of the
hearing panel as to procuring cause shall be conclusive with respect to all current or
subsequent claims of the parties for compensation arising out of the underlying
cooperative transaction. (Adopted 1/97)
4) Where two or more listing brokers
claim entitlement to compensation pursuant to open listings with a seller or landlord who
agrees to participate in arbitration (or who requests arbitration) and who agrees to be
bound by the decision. In cases where one of the listing brokers has been compensated by
the seller or landlord, the other listing broker, as complainant, may name the first
listing broker as respondent and arbitration may proceed between the brokers. (Adopted
1/97)
