On Saturday, the board of directors of the National Association of Realtors (NAR) approved changes to the trade group’s professional standards that allow state and local associations to more frequently publish to their members the names of Realtor Code of Ethics violators and include photographs of the violators — if they want to.
In addition, listing brokers will now also be required to provide written confirmation that they either have submitted a buyer’s offer to a seller or landlord, or that the seller or landlord has waived the obligation to have the listing broker present the buyer’s offer.
“Every Realtor in the country should be proud of the steps taken today to increase professionalism and raise the bar even higher on ourselves,” said NAR President Elizabeth Mendenhall in a statement on Saturday.
“We have heard from members for years about strengthening professionalism, and today we took an important step forward. The changes we made to the Code of Ethics will bring invaluable benefit to consumers and allow Realtors to serve them to the best of our abilities.
“These changes will also lead to greater accountability to one another to ensure a better transaction and consumer experience and will instill greater trust in Realtors as important partners in the real estate transaction. This is all about being the best Realtors that we can be for our clients.”
Only real estate professionals who are also members of Realtor associations must abide by the NAR Code of Ethics. NAR requires its 1.3 million members to complete training on the Realtor Code of Ethics every two years.
Before Saturday’s vote, local and state associations could, at their discretion, publish the names of ethics violators so long as the violation was a second offense occurring within three years; the publication was in a medium where only members have access; the brokerage where the violator was licensed was not published; publication was consistent and uniform, not selective; and the only additional information that could be included was the code article violated and the discipline imposed, according to NAR’s professional standards policy.
In cases where the violator’s name was similar to another member’s name, the violator’s license number or office address or both could also be published.
These policies remain in place, but after Saturday’s vote, associations can now also choose to increase the timeframe in which publication occurs for certain disciplinary actions and can also publish photos and/or a description of the violation or violations, so long as all names are redacted except the name of the violator, according to the new policy.
Associations also have the option of not just publishing the violations of repeat offenders, but also all instances in which violators are disciplined with a letter of reprimand, a fine (ethics citation fines are not included unless the association has adopted a policy to include them), a suspension and/or an expulsion.
In such cases, the local or state association’s legal counsel must review the decision, discipline and information to be published before publication. Such violations will still not be visible to the public.
In its rationale for the changes submitted to the 800-member NAR board, NAR’s Professional Standards Committee said, “More frequent publication of Code of Ethics violators and inclusion of the violator’s photograph can provide an increased deterrent to unethical behavior.”
The changes are based on a pilot program of the California Association of Realtors that published the names and photos of members who violated the Realtor Code of Ethics in a members-only section of its website. C.A.R. is the country’s largest state Realtor association with more than 190,000 members.
That pilot program launched in August 2014. The Illinois Association of Realtors (now Illinois Realtors) soon thereafter began publishing ethics violations, but not naming names.
The NAR board terminated C.A.R.’s pilot program on Saturday because the adopted changes “codify the California Association’s program,” the Professional Standards Committee said.
The board also approved an addition to NAR’s standards of practice regarding the submission of offers: “Upon the written request of a cooperating broker who submits an offer to the listing broker, the listing broker shall provide a written affirmation to the the cooperating broker stating that the offer has been submitted to the seller/landlord, or a written notification that the seller/landlord has waived the obligation to have the offer presented.”
The change will benefit both brokers and consumers, according to NAR leaders.
“There’s been real frustration by a lot of brokers, especially in busy markets, that they’re not sure if their offers were even looked at. That kind of thing breaks down the spirit of cooperation. This is a way to restore that,” said Colin Mullane, a NAR regional vice president and an Oregon broker-owner, in a statement.
The Professional Standards Committee added, “In a real estate market where inventory is extremely low, this requirement establishes a valuable assurance of offer presentation for consumers.”
The changes come over a month after the publication of The Parker Principles, a collective manifesto by real estate leaders of 12 exhortations designed to encourage excellence throughout the industry, two of which specifically outline practices similar to those adopted by NAR.
They include Principle 4: “Strictly enforce ethical standards to increase professionalism,” and Principle 5: “Raise the quality of real estate services to create a delightful and more certain consumer experience.”
Mendenhall herself was among of the group of real estate leaders who drafted the principles at Inman’s Disconnect in the Desert conference in late March 2018 and specifically led the discussion of professional standards, according to Inman founder Brad Inman.