Many, if not the majority, of our members work in the field of residential real estate. Yet, some members may consider exploring working on commercial transactions. As a real estate licensee, you can work on both residential and commercial transactions. However, as a REALTOR®, you are bound to the Code of Ethics, which includes Article 11.
Article 11 states:
The services which REALTORS® provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, land brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction, and international real estate.
This means that no matter in which particular real estate discipline you work, you must do so competently and at a reasonable standard of practice. This begs the question, “If I have never worked as a commercial agent, how can I be competent enough to start?”
The second part of Article 11 answers this question:
REALTORS® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. Any persons engaged to provide such assistance shall be so identified to the client and their contribution to the assignment should be set forth.
The purpose of Article 11 is to make sure REALTORS® do not take on responsibilities and provide services to clients for which they are not adequately prepared. For example, if a residential broker with little to no commercial experience is approached by a client wanting to market a complex business property, the broker may not be competent enough to help that client. However, sometimes a client may value the general abilities and integrity of a particular REALTOR®, and the client may be insistent that he or she wants to use that REALTOR® even if the REALTOR® does not have the necessary experience and competence. So, if you find yourself in this situation, what do you do?
First, make sure you fully disclose to the prospective client that you do not possess the experience and expertise to provide the service requested. Second, obtain assistance from someone who is competent in the field. Lastly, fully inform the client of the person providing assistance and the degree to which that person is contributing to the assignment.
If you follow these steps, you can engage in new real estate disciplines while still abiding by the Code of Ethics.