Real Estate

Capitol Rioters Could Face Penalties Under This NAR Policy

Members of the National Association of Realtors who participated in a violent siege of the U.S. Capitol earlier this month that resulted in five deaths won’t face any discipline under the Realtor Code of Ethics, but may face sanctions under the trade group’s membership rules.

NAR has been tight-lipped about possible penalties for any of its members who participated in the insurrection. So far, two real estate agents have been arrested in connection with the violent assault: Klete Keller, a former five-time Olympic swimming medalist for the U.S. and a current commercial real estate agent, and Jenna Ryan, a Frisco, Texas-based residential broker.

According to the federal complaint against Ryan, just before entering the U.S. Capitol, Ryan filmed herself saying, “y’all know who to hire for your Realtor. Jenna Ryan for your Realtor.” She also bragged about her home selling skills on camera during the riot.

Keller was charged with knowingly entering a restricted building to impede an official government function, disorderly conduct, and obstructing law enforcement officers, while Ryan was charged with knowingly entering a restricted area without permission to do so and impeding or disrupting the orderly conduct of government business.

Not against the code

After the riot, NAR told Inman, “NAR has consistently provided that its Code of Ethics does not apply to criminal activity.” The 1.4 million-member trade group said last week that participating in the Capitol riot did not violate its new ethics policies against hate speech unless a Realtor directed hate speech toward a protected class while doing so. This week, NAR said, “[T]he events taking place at the Capitol on January 6th would not be subject to discipline under the Code of Ethics, unless such hateful speech was proven to be used by a Realtor.”

Indeed, there does not appear to be any article in the Realtor Code of Ethics that condemns violations of any law that is not real estate-related. That means there is nothing in the code that prohibits any of the behavior for which Keller and Ryan have been charged or of other, more serious charges such as seditious conspiracy or even murder or rape.

Nonetheless, in searching through NAR’s Code of Ethics and Arbitration Manual, Inman found a policy that local associations can use to discipline Realtors that have been convicted of crimes.

The manual states that disciplinary action may be taken against a member “[o]n a member being convicted, adjudged, or otherwise recorded as guilty by a final judgment of any court of competent jurisdiction of a felony or a crime involving moral turpitude.” The manual does not define what qualifies as a “crime involving moral turpitude.”

Asked about this policy, NAR spokesperson Wes Shaw told Inman via email, “The provision to which you are referring relates to a membership qualification, not an obligation under the Code of Ethics. Local Realtor associations maintain membership qualification criteria that provide qualifications for Realtor membership, as well as extensive procedures in place for their enforcement which ensure protection of the due process rights of all individuals involved.”

Shaw added,”It’s the local association’s membership qualification criteria, and they may be subject to discipline. Realtors have a set of obligations under the Code and a set of obligations as a result of their membership.”

Examples of discipline included in the manual are: a letter of warning or a letter of reprimand with a copy placed in a member’s file, an education course, a fine not exceeding $15,000, suspension of membership and termination of membership.

‘Just SCREAMS unethical’

The vaunted preamble of the Realtor Code of Ethics, which begins “Under all is the land,” mentions Realtors standing against practices that might bring dishonor to the profession.

It reads: “[Realtors] identify and take steps, through enforcement of this Code of Ethics and by assisting appropriate regulatory bodies, to eliminate practices which may damage the public or which might discredit or bring dishonor to the real estate profession. Realtors having direct personal knowledge of conduct that may violate the Code of Ethics involving misappropriation of client or customer funds or property, discrimination against the protected classes under the Code of Ethics, or fraud, bring such matters to the attention of the appropriate Board or Association of Realtors.”

The preamble also says, “The term Realtor has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations.”

But according to Code of Ethics and Arbitration Manual, the preamble is “aspirational” and ethics complaints cannot be filed against a Realtor on the basis of it. When a Realtor files an ethics complaint against another Realtor, they must cite one of the code’s 17 articles.

NAR has always held that what distinguishes a Realtor from a non-Realtor licensee is its strict code of ethics. That the Realtor Code of Ethics says nothing about violations of non-real estate-related laws, even those that involve violence, may be a surprise to some Realtors.

“Participating in an insurrection just SCREAMS unethical to me,” Andrea Morgan, a Realtor broker at Atlanta Intown Real Estate Services, told Inman via Twitter.

While some Realtors and members of the public have called for agents to lose their licenses as a result of participating in the Capitol riot, NAR has pointed out that state governments control licensing rules, not NAR. In response, Morgan said, “I think it’s factually correct & ethically weak. NAR created the code of ethics as a means of distinguishing Realtors … from licensees and to establish a baseline level of ethical behavior.”

Laryn Callaway, an agent at Launch Real Estate in Arizona, told Inman via email, “It would seem that upholding the law *generally* is at least implied in our Code. The public needs to trust us.”

Asked whether NAR considers violations of the law generally or the actions of those who laid siege to the Capitol specifically ethical and why its code of ethics doesn’t address criminal activity, NAR’s Shaw said, “The Realtor organization remains committed to ethics, integrity, and respect for the diverse viewpoints of our membership.”

He added, “The Code largely exists as a set of ethical obligations in addition to what may be required by local, state, or federal laws. We continue to stand with federal law enforcement as they work to thoroughly investigate the events of January 6th and ensure all those accused of breaking the law are prosecuted to the fullest extent.”

By contrast, some trade organizations, such as the Professional Golfers’ Association of America, consider conviction of a felony grounds for automatic expulsion from membership in their code of ethics. Disabled American Veterans, which has one million members, and other veterans groups have already said that they will expel members who participated in the Capitol riot.

Realtor by day, insurrectionist by night?

When promoting ethics changes against hate speech in November, NAR leaders made clear that the changes were proposed in large part to protect the Realtor brand.

Matt Difanis, chair of the Professional Standards Committee, stressed that the Realtor brand is not something a member can shed like an overcoat after leaving the office. He praised NAR’s “That’s Who We R” ad campaign, which highlights Realtors’ community leadership, but said that “high profile instances of bigoted hate speech” happening outside of real estate transactions were threatening that image.

“If we end up with Realtors who become late night keyboard bigots saying it’s outside the confines of the real estate transaction and those get shared and those go viral, ladies and gentlemen, that — for that news cycle  — that becomes who we are,” Difanis said.

In a blog post, real estate consultant Rob Hahn said Jenna Ryan’s case is a “test” for NAR because of the new ethics policies’ emphasis on protecting the Realtor brand, including the policy against hate speech, Standard of Practice 10-5.

“If the rationale for 10-5 was to protect the Realtor brand, then no, NAR cannot refuse to do anything about Ms. Ryan because her actions were ‘outside of 10-5,’” Hahn wrote.

“At a minimum, NAR will have to condemn her actions in the strongest language possible, then immediately move for a new SoP 10-6 or some new thing that would let them punish Ms. Ryan and others like her.

“You cannot claim with a straight face that you put 10-5 into place to protect the Realtor brand, then ignore what Ms. Ryan and others are doing to the Realtor brand in half of the population and kick the responsibility over to the government.”

NAR declined to comment on Hahn’s assertions. In a comment on the post, Austin, Texas, broker Robert Griffice noted that Ryan openly bragged about participating in criminal conduct.

“As a NAR member, I do not want to associate with nor be a part of an organization that allows admitted criminals as members,” he said. “It’s as simple as that, conviction or not.”

Email Andrea V. Brambila.

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