A discussion of Realtor Ethics and the Law

To help distinguish between the duties of Real Estate Brokers and Realtors, it is important to understand that, while all Realtors are licensees, not all licensees are Realtors. Realtors are those licensees who have elected to join the National Association of Realtors (NAR) through membership in a local Board of Realtors.

As a condition of their membership all Realtors swear to support the NAR'S "Code of Ethics". For the purpose you are visiting today, "Realtor Ethics" is defined by me as reflecting strictly those behaviors and conduct addressed in the Code, which is published annually by the NAR.

By virtue of this, all Realtors are subject to an additional layer of guidelines that serve to supplement those laid down by Florida Statutes 475 and 61J. However, it is my understanding that courts in the state often look to the Code as the standard of conduct expected of all licensees -- both Realtors and unaffiliated.

There are two NAR-mandated functions at the local Board level.

	The role of the Grievance Committee is somewhat like that of a Grand Jury, which filters both complaints against agents and brokers, and arbitration requests. Occasionally Larry personally prosecuted complaints at a hearing on behalf of either the Grievance Committee itself or of a Complainant who is unable to attend or is not entirely competent to proceed. This additional function is permitted by NAR policy.
	As for the Professional Standards Committee, its role is to establish hearings where sworn testimony is heard and evidence is presented for examination and review by a panel of three Realtors. Upon conclusion of a hearing, the panelists vote on the charges and we either find for dismissal of the charges or agreement with at least one of them. If the latter, the panel immediately determines appropriate one or more disciplines from a list established by the National Association of Realtors.
	Professional Standards panels also conduct arbitration hearings to determine which broker is procuring cause in a closed transaction and thus due the contested real estate commission.

Realtor ethics are unique.

They are distinct from business and attorney ethics, although there is some overlap. For example, a Realtor can cheat a vendor and not breach any of the Code's ethical standards. But instead, if the victim is a customer or another Realtor, then the Realtor may be guilty of violating the Code of Ethics.

Many people are surprised to find out that a similar distinction applies to serious crimes such as armed robbery and dealing illegal drugs. These activities are not addressed by any article of the Code.

Realtors swear to abide by the Code, and typically learn its principles during their initial indoctrination. Most Realtors proudly adhere to the Code of Ethics throughout their entire careers in the business, but some occasionally fail to live up to its standards because of ignorance or laziness or greed or mental lapses resulting in another party's financial loss or physical injury.

But ignorance, laziness, greed, and mental lapses do not apply solely to Realtors in troubled real estate transactions. The principal parties -- buyers, sellers, landlords, & tenants -- are equally susceptible to these human frailties. So when damages are claimed and a suit is filed, it's often critical to determine if the Realtor's conduct conformed to ethical standards...or strayed from them.

Florida Statutes

Licensed as a Broker-Associate in Florida, Larry helps attorneys with Florida Statutes 475 and 61J2 and their practical interpretation. In a typical lawsuit, a licensee's conduct is measured against both Florida law and the Code of Ethics. It is possible that a course of conduct may be legal but unethical, while another may be illegal but not unethical.

That is why you are here, now, reading this. Larry Lowenthal will help you find the answer to the questions,

"Was the Realtor's conduct ethical?" "Was it legal?"
"Did it meet the standard of care?" "Who earned the commission?"