Important Changes to REALTOR Code of Ethics
The NAR Professional Standards Committee met on October 5, 2020, to consider recommendations from its Interpretations and Procedures Advisory Board on the Code of Ethics’ applicability to discriminatory speech and conduct. The Committee approved the Advisory Board’s recommendations, and six of them were presented to and approved by the NAR Board of Directors at their November 13, 2020 meeting. Two of the changes will be effective immediately. View training schedules, materials, and session replays.
Please see below for information on the policy changes approved by the Board of Directors, as well as frequently asked questions and other resources.
Why was the Professional Standards Committee looking at this issue?
During the social unrest throughout the nation in late spring and summer of 2020, NAR received an unprecedented number of complaints about REALTORS® posting discriminatory speech and conduct online, especially on social media. Local and state associations experienced a similar influx of these complaints. A local association of REALTORS® wrote to NAR President Vince Malta requesting that NAR consider the Code of Ethics’ applicability to this type of speech and conduct.
A special meeting of the NAR Professional Standards Committee was held that included a panel discussion on race, real estate, and association leadership. The Committee ultimately referred the issue of the Code’s applicability to discriminatory speech and conduct to the Interpretations and Procedures Advisory Board for their review.
The Advisory Board met virtually five times, and engaged in numerous discussions on the Hub, in order to create a package of recommendations. The Professional Standards Committee met in a special meeting on October 5, 2020 and approved all the recommendations of the Advisory Board. Six of the eight recommendations approved by the Committee required approval by the NAR Board of Directors, who considered the recommendations during their meeting on November 13, 2020. All the recommendations were approved by the Board.
What do the policies approved by the Board of Directors include?
The new or amended policies can be grouped into three broad categories:
- Changes to the Code of Ethics’ applicability to a REALTOR®’s activities;
- A new Standard of Practice under Article 10 prohibiting discriminatory speech and conduct; and,
- Revisions to the definition of “Public Trust”.
Changes to the Code of Ethics’ applicability to a REALTOR®’s activities
At present, Policy Statement 29 in the Code of Ethics and Arbitration Manual limits the applicability of the Code to real estate-related activities and transactions involving REALTORS®. As such, members can engage in conduct and speech that is discriminatory and abhorrent, but unless it can be tied to a real estate-related activity or transaction, the Code of Ethics, specifically Article 10, does not apply. The Board of Directors approved a revised policy that expands applicability to all of a REALTOR®’s activities. While the Code’s applicability has expanded, most Articles and Standards of Practice remain specific to real estate transactions and other real estate-related activities.
The Board voted that these policy changes become effective immediately.
A new Standard of Practice under Article 10 prohibiting discriminatory speech and conduct
The Board of Directors approved a new Standard of Practice under Article 10:
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.
This proposed Standard of Practice directly flows from the requirement to not deny equal professional services or be parties to a plan to discriminate. Specifically, bias against protected classes revealed through the public posting of hate speech could result in REALTORS® not taking clients from certain protected classes or not treating them equally, which would lead to violations of the Fair Housing Act due to overt discrimination or disparate impact.
The Board voted that this new Standard of Practice becomes effective immediately.
Revisions to the definition of “Public Trust”
The Board of Directors approved expansion of the definition of “public trust” to include all discrimination against the protected classes under Article 10 of the Code of Ethics and all fraud.
At present, the definition of “public trust” includes demonstrated misappropriation of client or customer funds or property, willful discrimination, or fraud resulting in substantial economic harm. This recommendation expands the definition to include all discrimination against the protected classes under Article 10, and all fraud. As a result, associations are now required to share with the state real estate licensing authority final ethics decisions holding REALTORS® in violation of the Code of Ethics in instances involving real estate-related activities and transactions where there is reason to believe the public trust, as expanded, may have been violated.
This policy change will be effective January 1, 2021.
The Board of Directors further approved enhancements to the Code of Ethics and Arbitration Manual that are consistent with the three broad categories above.
The new Standard of Practice seems to limit my right to free speech as established by the First Amendment to the Constitution. How can NAR legally adopt a policy like this?
The First Amendment provides that neither the United States Congress nor any state may abridge the freedom of speech of American citizens. With some exceptions, the First Amendment does not prohibit a private organization from restricting the speech of its members, employees, or users. NAR is a private association that is supported by dues from members, is not exercising any governmental function, and has no subpoena power or other powers generally available to state agencies. As such, the First Amendment does not preclude NAR from imposing this ethical duty as a condition of membership.
I should be able to say whatever I want on my personal social media profile. It doesn’t impact my ability to do my job. Why is what I say there now subject to the Code? This is going too far.
The Board of Directors discussed that a REALTOR®’s speech and conduct reflect on the REALTOR® organization whether said publicly on a business social media profile, or privately on a personal one. According to the Preamble of the Code of Ethics, REALTORS® should be guided by the spirit of the Golden Rule of treating others as one would like to be treated. When a REALTOR® pledges to abide by the Code of Ethics, the highest principles and ethics of REALTORS® must followed in all their activities, and cannot be abandoned in a profession dedicated to protecting the best interests of consumers.
Put simply, when one REALTOR® engages in discriminatory speech and conduct, those actions demonstrate to consumers that they represent the actions of REALTORS® collectively. The REALTOR® brand is built on ethics and integrity. Discriminatory speech and conduct to the contrary depletes the strength of that brand. It is incumbent upon our organization to set the bar high, and communicate those elevated standards, to protect the REALTOR® brand and ensure its strength endures for years to come.
Additionally, this proposed change does not mean that the Code of Ethics will apply in all portions of a REALTOR®’s personal life as many of the Code’s provisions are specifically tied to real estate and real estate transactions.
Doesn’t this mean that if I post my opinion online and someone doesn’t agree with it, that I can lose my membership and be forced out of the business?
As with any alleged Code violation, ethics complaints alleging a violation of Article 10 as interpreted by Standard of Practice 10-5 will be processed consistent with the local or state association’s professional standards enforcement process, which affords all parties a full and fair opportunity to present their case, defend themselves, provide evidence and witnesses, and be represented by counsel.
Additionally, membership in an association of REALTORS® is voluntary, and any discipline imposed does not automatically impact an individual’s ability to hold a real estate license.
How do these policies impact consumers?
When one REALTOR® posts discriminatory speech or conduct online, that content becomes reflective of REALTORS® on the whole. Left unchecked, those statements become who we are as an organization, and further reinforce the barriers to homeownership experienced by so many Americans. These policies are one very impactful way we can advance equity and fairness in the real estate industry, and ensure access to the American Dream for all.