In November 2019 at the NAR Convention, the Professional Standards Committee met and voted on several changes to the Code of Ethics.
To begin, you now have three years to complete Code of Ethics training, rather than every two years. This change applies to the current training cycle. So now, rather than having to complete your training by December 31, 2020, you’ll have until December 31, 2021. The class will also need to be through or approved by a local association.
There were also substantive changes to the Code of Ethics:
Under Article 3 – there is a new Standard of Practice. Article 3 says:
REALTORS® shall cooperate with other brokers except when cooperation is not in the client’s best interest. The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker.
The new article says:
REALTORS® may not refuse to cooperate on the basis of a broker’s race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.
This is a cooperation requirement. It closely mirrors the obligation under Article 10 which prohibits REALTORS® from denying equal professional services to any person on the basis of their membership in a protected class.
The other change is under Article 12. Article 12 address advertising requirements. It states:
REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional.
Under Article 12, the Committee voted to change Standards of Practice 12-1 and 12-2. It amended 12-1 and deleted 12-2.
Standards of Practice 12-1 and 12-2 addressed when REALTORS® can use the term free. 12-1 expressly allows REALTORS® to use the term free in advertising so long as all terms are clearly disclosed. 12-2 allowed REALTORS® to represent services as free even if they may be paid by another source as long as the fact that the REALTOR® will receive a benefit is clearly disclosed.
The amended Standard of Practice 12-1 for 2020 states:
Unless they are receiving no compensation from any source for their time or services, REALTORS® may use the term “free” and similar terms in their advertising and in other representations only if they clearly and conspicuously disclose (a) by whom they are being, or expect to be, paid; (b) the amount of the payment or anticipated payment; (c) any conditions associated with the payment, and (d) any other terms relating to their compensation.
This effectively combines 12-1 and 12-2, but also adds some specific disclosure requirements if you are receiving payment or expect to be paid by a third party.