The Code of Ethics is designed to establish a public and professional consensus against which the practice and conduct of REALTORs® and REALTOR-ASSOCIATE®s may be judged. REALTORS® and REALTOR-ASSOCIATE®s in joining a Board signify their intention to abide by the Code and thereby enhance the public and
professional image of themselves and all other REALTORS®. Adherence to the Code is the first great bond between REALTORS® and REALTOR-ASSOCIATE®s throughout the country, and is an obligation voluntarily accepted by them to ensure high standards of professional conduct to serve the interests of their clients and customers (from the Introduction to the Code of Ethics and Arbitration Manual, NATIONAL ASSOCIATION OF REALTORS®, 2022 edition). Local Boards of REALTORS®, supported by the
state and National Associations, have the awesome responsibility of fostering awareness, understanding, and appreciation for the duties and obligations the Code imposes on those who accept it as their guide to professionalism. A corollary duty of Boards is to receive and resolve complaints alleging potentially unethical conduct by REALTORS®. The REALTOR organization is firmly committed to comprehensive education of REALTORS® and the public about the Code and the protections it affords, and
also to vigorous, fair, and uniform enforcement when complaints are brought against members. The Code of Ethics and Arbitration Manual (Manual) details policies and procedures governing enforcement efforts. Code enforcement achieves a number of goals. Where REALTORS® are wrongly or mistakenly charged with unethical conduct, the hearing process provides personal and professional vindication. Where violations are determined, the hearing process educates members about their professional
obligations and serves as a meaningful deterrent to future violations. The Introduction goes on to point out that the ethics hearing process “. . . is educational in that it raises the consciousness of members to the meaning and significance of the Code” and that “many ethics violations occur inadvertently or through ignorance, and the hearing procedure serves as an effective educational tool.” Allegations of unethical conduct are often understandably viewed by respondents as threats to
their professional and personal reputations. This can result not only in the mounting of vigorous defenses but also, at times, to threats of legal challenge should a violation be determined and discipline imposed. Given that membership confers valuable rights, Boards need to strictly adhere to their established procedures when considering potential ethics violations. This caution ensures that the rights of the parties will be observed and that legal exposure of Boards will be minimized. At
the same time, well-founded caution should not be confused with reservation, reluctance, or hesitancy. The Code’s duties become aspirations at best, and potentially meaningless, if not enforced, and enforced with vigor and determination. Fundamental to fair and consistent Code enforcement is reasonable and judicious use of discipline, as both an educational device and as punishment. The Manual authorizes a wide variety of sanctions that may be imposed for ethics violations and for
violations of other membership duties. These range from simple letters of warning to expulsion from REALTOR membership. Between these extremes are mandatory attendance at remedial educational sessions, fines, probation, and suspension. These sanctions, and the circumstances under which they may be imposed, are discussed in detail in the Manual. The National Association does not recommend specific discipline for certain offenses, or for violations of particular Articles of the Code. This is
in deference to the wisdom and autonomy of Hearing Panels privy to the details of complaints coming before them; in recognition of the fact that no two complaints are identical; and in view of the fact that the details of each hearing, including the experience of respondents, their history of prior violations, and mitigating or extenuating circumstances, may all come into play in determining an appropriate penalty. At the same time, there are key points to be considered with respect to
discipline.
Crafting appropriate, meaningful discipline can challenge panels that have concluded that the Code has been violated. This discussion is offered as guidance, rather than as a hard and fast template, to assist panels in meeting their key role in ensuring the Code’s viability and vitality through vigorous and evenhanded enforcement. Suggested guidelines that can be modified locally so long as the discipline proposed is consistent with the permissible forms authorized in the National Association’s Code of Ethics and Arbitration Manual, can be found in the section of this Appendix entitled “Disciplinary Guidelines.” Progressive DisciplineDiscipline imposed for violations of the Code of Ethics or for violations of other membership duties should be progressive, that is discipline should increase incrementally for subsequent violations. The disciplinary emphasis where first time violations occur should be primarily educational. Repeated or subsequent violations should result in more serious forms of discipline being utilized, including substantial fines, suspension, and termination of membership. At the same time, a gray area can exist where a first time violation is not attributable to ignorance or oversight but rather to blatant disregard for the Code and its obligations. While the educational emphasis of Code enforcement cannot be disregarded, the fact that the Code exists to protect the public must be carefully considered in determining appropriate discipline. Three contrasting examples are provided to illustrate these points. Example 1: REALTOR® A, who had recently earned her real estate license, was found to have violated Article 12 for advertising a listed property without disclosing her status as either a REALTOR® or as a real estate licensee. At the hearing, REALTOR® A acknowledged her oversight and it was clear to the Hearing Panel that the violation was inadvertent and unintentional. The panel concluded that a letter of reprimand and attendance at a three (3) hour Code of Ethics update session was appropriate. Two months later, REALTOR® A was charged with a nearly identical violation. After concluding that she had, in fact, violated Article 12, the Hearing Panel was given access to REALTOR® A’s files to see whether REALTOR® A had previously violated the Code so that appropriate discipline could be recommended. It was the conclusion of the Hearing Panel that a second violation of the same Article, occurring just months after the first violation, warranted more serious discipline. REALTOR® A was fined $1,000 and required to attend a full day ethics education program. (Revised 5/13) Three months later, REALTOR® A was again found to have violated Article 12. The Hearing Panel was then given access to REALTOR® A’s file and, upon learning of the two (2) prior violations in less than a year, recommended a $5,000 fine. (Revised 5/13) Example 2: REALTOR® B, who had recently received his real estate license, was found to have violated Article 4 for failing to disclose to his seller-client that the purchaser that REALTOR® B had procured was, in fact, REALTOR® B’s wife. In determining appropriate discipline, the Hearing Panel considered REALTOR® B’s limited experience in the real estate business and the fact that this was the first time that REALTOR® B had been found in violation of the Code. The Hearing Panel also considered that REALTOR® B’s failure to disclose had not been inadvertent or unintentional and that REALTOR® B had knowingly concealed from his client a key fact that might have influenced the client’s decision to accept the offer from REALTOR® B’s wife. Based on the seriousness of the violation and REALTOR® B’s conscious disregard for his disclosure obligation, the Hearing Panel recommended a $5,000 fine and retaking the ethics orientation required for new members. (Revised 5/13) Example 3: In social media discussions, REALTOR® C posted several discriminatory and offensive comments which were deemed to be in violation of Article 10 as they discriminated against individuals on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. In determining appropriate discipline, the Hearing Panel considered REALTOR® C’s comments as hate speech and discrimination in violation of Article 10 and had reason to believe that a violation of the public trust occurred. Based on the offensiveness of REALTOR® C’s comments and his total disregard for the Code of Ethics’ obligation to not be a party to any plan to discriminate against members of the protected classes of Article 10, the Hearing Panel recommended a $5,000 fine and mandatory completion of implicit bias training. (Adopted 11/20) Disciplinary GuidelinesCode enforcement achieves a number of important goals. Where REALTORS® have been wrongly or mistakenly charged with unethical conduct, the hearing process provides personal and professional vindication. Where violations are determined, the hearing process and resulting discipline educates members about their professional obligations and serves as a meaningful deterrent to future violations. Determining that a violation of one or more Articles has occurred is only a part of a Hearing Panel’s job. Equally important is crafting discipline commensurate with the offense. Panels will want to consider that many violations occur due to lack of familiarity with the Code and its obligations, inexperience, oversight, or as unintentional mistakes. In such cases, the primary purpose of discipline should be educational to ensure that similar violations do not occur in the future. In other cases, violations can occur because of knowing disregard for the Code and its duties. In such cases, greater emphasis will be placed on the punitive nature of discipline. Hearing Panels are cautioned of the due process concerns of considering a respondent’s history of Code violations, as considering too long of a history involving different types of violations can unreasonably affect the severity of the discipline. Typically, Associations might look back a minimum of three (3) years, however, if there is consistency in the types of violations or if the violations are of the public trust, considering a longer history of violations could be appropriate in crafting meaningful discipline aimed at stopping the behavior. (Adopted 11/20) Factors Hearing Panels should consider in determining appropriate discipline include, but are not necessarily limited to:
With these questions in mind, panels can be guided by (but are not bound by) the following guidelines which may be modified locally at the discretion of each local Board. First violation example #1 (or first violation within three [3] years):
Possible discipline:
First violation example #2 (or first violation within three [3] years):
Possible discipline:
First violation example #3 (or first violation within three [3] years):
Possible discipline:
Repeat violations example #1 (within three [3] years):
Possible discipline:
Repeat violations example #2 (within three [3] years):
Possible discipline:
Repeat violations example #3 (within three [3] years):
Possible discipline:
In addition to imposing discipline, the Hearing Panel can also recommend to the Board of Directors that the disciplined member be put on probation. The fact that one or more forms of discipline will be held in abeyance during the probationary period does not bar imposition of other forms of discipline which will not be held in abeyance. Probation is not a form of discipline. When a member is put on probation the discipline recommended by the Hearing Panel is held in abeyance for a stipulated period of time not longer than one (1) year. Any subsequent finding of a violation of the Code of Ethics during the probationary period may, at the discretion of the Board of Directors, result in the imposition of the suspended discipline. Absent any subsequent findings of a violation during the probationary period, both the probationary status and the suspended discipline are considered fulfilled, and the member’s record will reflect the fulfillment. The fact that one or more forms of discipline will be held in abeyance during the probationary period does not bar imposition of other forms of discipline which will not be held in abeyance. (Revised 5/14) More serious forms of discipline (including possible termination of MLS privileges, suspension from membership for up to one [1] year, or termination of membership for up to three [3] years) may be appropriate in cases of very serious violations or in cases of repeated violations. Cases in which there is reason to believe that violations of the public trust, including demonstrated misappropriation of client or customer funds or property, discrimination against the protected classes under the Code of Ethics, or fraud have occurred are considered particularly egregious. Associations are encouraged to critically examine these types of cases and recommend discipline consistent with the seriousness of these violations, their harm to consumers, and to the reputation of REALTORS® as committed to the highest level of professionalism. (Revised 11/20) Important Note: These are not sentencing rules or requirements, but rather simply suggestions to guide Hearing Panels in determining appropriate discipline based both on the current violation and the violator’s previous record of ethical conduct. Search Code of Ethics and Arbitration Manual Which of the following is not true regarding compensation and Maryland licensees?Which of the following is NOT true regarding compensation and Maryland licensees? Licensees may not accept compensation from more than one transaction party without all parties' knowledge.
What is the highest amount you can be fined by the Maryland real estate Commission for a serious violation?The most severe punishment will involve the revocation of a real estate license and a large fine in excess of $10,000. This might happen when a Maryland real estate broker collects rental income on behalf of his client, but fails to disburse the money to the client.
Which of the following is not cause for the Maryland real estate Commission to summarily suspend a licensee's real estate license?Which of the following is NOT cause for the Maryland Real Estate Commission to summarily suspend a licensee's real estate license? The licensee fails to disclose personal interest in a transaction.
What is the maximum penalty if you're convicted of committing a serious violation and your broker is found to have knowledge of it?What is the maximum outcome if you're convicted of having committed a serious violation and your broker is found to have knowledge of it? You are fined and could have your license suspended or revoked.
|