Yes, the NAR Code of Ethics is a higher standard — but it isn’t the highest standard. Here’s what one broker thinks about self-policing among Realtors and the consequences of ethics violations.
There are people who seem to believe that the National Association of Realtors (NAR) should be able to somehow punish or sanction members who participated in the Jan. 6, 2021 attack on the U.S. Capitol. As a member myself, I understand.
Our brand has been tarnished in the eyes of some and enhanced in the eyes of others. The NAR Code of Ethics is misunderstood. The code of ethics was designed to hold Realtors to a higher standard.
But the phrase “higher standard” is a bit vague. If a standard is higher, that doesn’t mean that it’s the highest standard. It may just mean that members of the NAR are held to a higher standard than people who do not belong to the NAR.
In some instances, the NAR standard may be lower than terms of service on a social media site. Behavior that’s against the law isn’t always a violation of the NAR Code of Ethics, especially if that behavior happens off the job.
In some states, convicted felons can’t get a real estate license. Licensing is a state function. NAR has members who don’t have real estate licenses. It’s probably possible to be a convicted felon and a member of NAR.
Real estate companies are always concerned about being sued and about protecting their brand. They’re often quick to dissociate themselves with agents who could cause harm.
NAR can’t throw people out for code of ethics violations. The only way a member can be sanctioned for violating the code of ethics is if someone files a complaint against them through a state association. Members will get thrown out of NAR if they fail to pay their dues.
The first step is to file the formal ethics complaint. The complaint goes through a process, and if all of the boxes are checked for what constitutes a valid ethics complaint, the complaint is heard by a panel of Realtors who serve on the state professional standards committee.
If the charge of an ethics violation is proven, the member may face disciplinary action. Usually, they are sentenced to a few hours of education or maybe a fine. Under some circumstances, a member can be thrown out of the NAR. I doubt that happens often, but with 1.4 million members, there are bound to be a few who get tossed out.
There is no article or standard of practice in the code of ethics that covers trying to overthrow the government.
It has been my experience that there are more violations of the code of ethics than there are ethics complaints. It’s also worth noting that the process of filing a complaint isn’t all that easy. It’s not like a person can just pick up the phone and talk to someone.
That said, anyone can file an ethics complaint against a Realtor. Membership of NAR is not required. If you believe that a member has violated the code of ethics, make a complaint through their state association.
This is where I should disclose that I serve on the professional standards committee in Minnesota and have served as a panelist for many ethics hearings.
I am, by no means, an expert on the code of ethics. Nothing about it is exactly easy to understand — and the way it’s written doesn’t help. I can assure you though that when I see a complaint, I read it and reread it. I then take notes and highlight the important passages. It takes hours to get ready for a hearing.
Over the years, I’ve seen some instances where real estate companies have let agents go because the agents have done something illegal or unethical. Often, those agents just go to another company. Sometimes, they end up quitting real estate and moving onto something else.
I’ve known several NAR members over the years who were charged with breaking various laws but never had an ethics complaint filed against them. I also know about a few who lost their licenses because they were convicted of crimes.
All to say, I believe in the code of ethics as a minimum standard, and I like the idea that there is some self-policing among Realtors.
Yes, the code of ethics is a higher standard, but it isn’t the highest standard. Brokers and real estate companies can set higher standards, and some of them do. If ethics are important to you, and if you are a real estate agent, find a company that holds its agents to a higher standard.