Article 16

NATIONAL ASSOCIATION OF REALTORS®

Code of Ethics Video Series

Article 16 of the Code of Ethics

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NATIONAL ASSOCIATION OF REALTORS®

REALTORS

shall not engage in any practice or take any action inconsistent with exclusive

representation or exclusive brokerage relationship agreements that other REALTORS

have with

clients. (Amended 1/04)

• 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 REALTORS

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 REALTORS

from making general announcements to prospects

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 REALTOR

. A

general telephone canvass, general mailing or distribution addressed to all prospects 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 1/04)

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 REALTOR

; and

Second, mail or other forms of written solicitations of prospects whose properties are

exclusively listed with another REALTOR

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 REALTORS

under offers of

subagency or cooperation. (Amended 1/04)

• Standard of Practice 16-3

Article 16 does not preclude REALTORS

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) or from offering the same type of service for property not

subject to other brokers’ exclusive agreements. However, information received through a

Multiple Listing Service or any other offer of cooperation may not be used to target clients of

other REALTORS

to whom such offers to provide services may be made. (Amended 1/04)

• Standard of Practice 16-4

REALTORS

shall not solicit a listing which is currently listed exclusively with another broker.

However, if the listing broker, when asked by the REALTOR

, refuses to disclose the expiration

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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 REALTOR

may contact the owner to secure such information and may discuss the terms upon which the

REALTOR

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

REALTORS

shall not solicit buyer/tenant agreements from buyers/ tenants who are subject to

exclusive buyer/tenant agreements. However, if asked by a REALTOR

, the broker refuses to

disclose the expiration date of the exclusive buyer/tenant agreement, the REALTOR

may contact

the buyer/tenant to secure such information and may discuss the terms upon which the

REALTOR

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 REALTORS

are contacted by the client of another REALTOR

regarding the creation of an

exclusive relationship to provide the same type of service, and REALTORS

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 prospect has retained a REALTOR

as an exclusive representative or exclusive

broker in one or more past transactions does not preclude other REALTORS

from seeking such

prospect’s future business. (Amended 1/04)

• Standard of Practice 16-8

The fact that an exclusive agreement has been entered into with a REALTOR

shall not preclude

or inhibit any other REALTOR

from entering into a similar agreement after the expiration of the

prior agreement. (Amended 1/98)

• Standard of Practice 16-9

REALTORS

, prior to entering into a representation agreement, have an affirmative obligation to

make reasonable efforts to determine whether the prospect is subject to a current, valid

exclusive agreement to provide the same type of real estate service. (Amended 1/04)

• Standard of Practice 16-10

REALTORS

, acting as buyer or tenant representatives or brokers, shall disclose that relationship

to the seller/landlord’s representative or broker at first contact and shall provide written

confirmation of that disclosure to the seller/landlord’s representative or broker not later than

execution of a purchase agreement or lease. (Amended 1/04)

• Standard of Practice 16-11

On unlisted property, REALTORS

acting as buyer/tenant representatives or brokers shall

disclose that relationship to the seller/landlord at first contact for that buyer/tenant and shall

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provide written confirmation of such disclosure to the seller/landlord not later than execution of

any purchase or lease agreement. (Amended 1/04)

REALTORS

shall make any request for anticipated compensation from the seller/landlord at first

contact. (Amended 1/98)

• Standard of Practice 16-12

REALTORS

, acting as representatives 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 1/04)

• 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 representative or broker, and not with

the client, except with the consent of the client’s representative or broker or except where such

dealings are initiated by the client.

Before providing substantive services (such as writing a purchase offer or presenting a CMA) to

prospects, REALTORS

shall ask prospects whether they are a party to any exclusive

representation agreement. REALTORS

shall not knowingly provide substantive services

concerning a prospective transaction to prospects who are parties to exclusive representation

agreements, except with the consent of the prospects’ exclusive representatives or at the

direction of prospects. (Adopted 1/93, Amended 1/04)

• Standard of Practice 16-14

REALTORS

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 REALTORS

shall compensate cooperating REALTORS

(principal

brokers) and shall not compensate nor offer to compensate, directly or indirectly, any of the

sales licensees employed by or affiliated with other REALTORS

without the prior express

knowledge and consent of the cooperating broker.

• Standard of Practice 16-16

REALTORS

, acting as subagents or buyer/tenant representatives 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/tenant representatives 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 1/04)

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• Standard of Practice 16-17

REALTORS

, acting as subagents or as buyer/tenant representatives 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 1/04)

• Standard of Practice 16-18

REALTORS

shall not use information obtained from listing brokers through offers to cooperate

made through multiple listing services or through other offers of cooperation to refer listing

brokers’ clients to other brokers or to create buyer/tenant relationships with listing brokers’

clients, unless such use is authorized by listing brokers. (Amended 1/02)

• 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

REALTORS

, prior to or after their relationship with their current firm is terminated, shall not

induce clients of their current firm to cancel exclusive contractual agreements between the

client and that firm. This does not preclude REALTORS

(principals) from establishing

agreements with their associated licensees governing assignability of exclusive agreements.

(Adopted 1/98, Amended 1/10)