You may have heard by now that at their November meeting, the NAR Directors approved changes to the Code of Ethics. The Code and related policies are reviewed annually. Often, the changes are relatively small. This last round saw some significant changes.
Expansion of the definition of “Public Trust”: The definition of “public trust” was expanded to include all discrimination against the protected classes as specifically listed under Article 10 of the Code of Ethics (not just “willful discrimination”) and all fraud, and to limit the reporting requirement to final ethics decisions involving real estate-related activities and transactions. Previously, the definition included only “fraud resulting in significant economic harm.”
New Standard of Practice 10-5:A new Standard of Practice under Article 10 was adopted. This new Standard of Practice became effective on November 13, 2020. Standard of Practice 10-5: REALTORS® must not use harassing speech, hate speech, epithets, or slurs based on race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.
What counts? (No, NAR is not the vigilante thought police)
Changes to Policy Statement 29, Code of Ethics and Arbitration Manual: Policy Statement 29, Code of Ethics and Arbitration Manual, was amended to expand the applicability of the Code of Ethics to all of a REALTOR®’s activities. These changes became effective on November 13, 2020.
While the application of the Code is expanded to all of a REALTOR’s activities, a complaint still must allege a violation of the Code. Here’s an example, getting a speeding ticket is not a violation of the Code. Painting a threat against a protected class on the side of your car would be. While your driving may be a violation of local municipal codes (posted speed limits) it has nothing to do with how you conduct your business as a REALTOR. But if you refer to a group of people in a way that is demeaning or hurtful, you cannot provide that group of people fair service as required by Article 10 of the Code of Ethics.
How is all this enforced?
It’s the same full due process that has always been in effect for Professional Standards and Code enforcement. Anyone may file a complaint, which is then reviewed by the Grievance Committee who may either dismiss it or forward it for a hearing. A hearing still entitles all parties to legal counsel, REALTOR Counsel, witness, testimony, the options to challenge panelists for cause.
If a violation is found, NAR has provided guidance about disciplinary actions. The established options for disciplinary actions have not changed, and range for a letter to be placed in the member’s confidential record at GBRAR, to a fine of between $0 and $15,000, to a suspension or termination of Association or MLS privileges. A $15,000 fine is highly unusual, and reserved for egregious or repeat violations.
NAR still provides guidance for hearing panels to set discipline. Appendix VII to Part Four, Sanctioning Guidelines, of the Code of Ethics and Arbitration Manual, was amended to provide more specific guidance for hearing panels on determining discipline for violations of Article 10, Article 3 as interpreted by Standard of Practice 3-11, and violations of the public trust. In addition, a new Appendix was adopted that provides guidance on revised Policy Statement 29 and Standard of Practice 10-5. These revisions are reflected in the 2021 Code of Ethics and the 2021 Code of Ethics and Arbitration Manual.
Frequently Asked Questions
Does this limit my right to post religious beliefs?
No. You are still free to post religious beliefs. The limitation is on harassing speech, hate speech, epithets or slurs based on race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.
Does this limit my right to post political opinions or support for a candidate?
No. NAR has made considerable effort in this change to protect a member’s political speech. You may even post that you disagree with another political viewpoint or candidate. You may not post harassing speech, hate speech, epithets or slurs based on race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. Note that political affiliation is not a protected class.
How can NAR dictate what I post? How is this not a violation of my First Amendment right?
NAR is a trade association, and membership is voluntary. Membership in the REALTOR® organization carries specific duties and obligations that are intentionally more restrictive than those of the public or non-members. The agreement to abide by the REALTOR® Code of Ethics as a condition and duty of membership includes an agreement to adhere to a higher standard of ethical conduct and speech than may otherwise be granted.
Isn’t the expansion to “all REALTOR activities” is an overreach? Why does NAR care what I do outside of my transactions?
Article 10, the “fair housing” article, is updated to add a new Standard of Practice 10-5 that reads “REALTORS® must not use harassing speech, hate speech, epithets, or slurs based on race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.” This new Standard of Practice flows directly from the requirement to not deny equal professional services or be parties to a plan to discriminate. Essentially, it is nearly impossible for an individual to make discriminatory comments and then turn around and provide equal services to the individuals discriminated against.
The application of the scope of Article 10 to “all REALTOR® activities” is inclusive of those activities outside of a real estate brokerage firm and real estate transactions including but not limited to social events, social media, and non-real estate related personal interactions.
Is anyone from the Association looking for violations? Are you going through my social media posts?
No. The changes do not require Associations to proactively monitor their members’ social media accounts. An ethics complaint must be filed and proceed through your normal professional standards enforcement process in order for a REALTOR® to potentially be found in violation of the Code of Ethics.
Read the comprehensive materials available on the NAR website.
Direct any specific questions or feedback to email@example.com.
Attend an online training: NAR is offering training on these changes to the Code of Ethics and professional standards policies. Information on how to register, and recordings of these trainings, can be found here.
In this video, Virginia Association of REALTORS General Counsel Laura Farley breaks down the changes and what they mean – and don’t mean.