Code of Ethics Questions

Sep 10, 2019

Q. A listing agent is refusing to let me re-show his listing and will not present my buyer's offer to the seller. Is that allowed?

A. Refusing to allow a buyer or agent into a house or to present an offer made by a buyer when that house is listed on the MLS, could prove to be a violation of MLS Rules and the REALTORS® Code of Ethics. Under MLS Rule 501.11, Participants are instructed that, "All listings to be submitted to the Service must contain a written authorization by the owner(s) of the property to appoint MLS Participants as Cooperating Brokers" and Rule 703.2 states that,  "Listing broker, or anyone licensed in the Listing Broker's office, must immediately advise the seller that an offer has been made and shall make timely arrangements for the offer(s) to be presented." Nowhere does it say the Listing Broker has the right to refuse to advise the seller that there is an offer! In addition, Article 3 of the Code of Ethics states, "REALTORS® shall cooperate with other brokers except when that cooperation is not in the client's best interest." The burden of proving that the cooperation is not in the best interest of the client is on the listing broker and that broker should have a signed writing from the seller to prove that the REALTOR® was instructed to refuse to cooperate with the other broker!

Q. I brought a buyer to another agent's listing and the buyer liked the property but wanted to know if there had ever been a fire in the house. The listing agent said that question was out of line and refused to ask the seller. Was that agent right?

A. In the Seller Property Condition Disclosure, one of the questions for the seller to answer has to do with whether a fire ever occurred in the house. If the NYS Legislature thought it was a material question, the buyer had every right to think so as well. The listing agent should have asked the seller, and if the seller did not want to answer that question, the seller could have told that to the agent. Who could have conveyed that response to the buyer? The listing agent's attitude seems to be in violation of Article 2 of the Code of Ethics, wherein an agent is required "to treat all parties honestly." Does that agent's behavior seem right to you? 

Q. Can I take a listing from a seller who is listed with another agent but is unhappy with that agent's representation? I would not do it until the seller had obtained an unconditional release from the other agent.

A. If you tell the seller to get the unconditional release, you could be violating MLS Rules 606.2 , which states that, "No multiple listing shall be solicited by any Participant other than the Listing Participant until after the expiration of the original listing," and/or 606.3, which states, "Participants shall not solicit a listing on property filed with the Service unless such solicitation is consistent with Article 16 of the Code of Ethics." Such solicitation shall be considered a violation of Article 16 of the Code of Ethics, however, when a REALTOR® engages, "in any practice or take(s) any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTOR® have with their clients," which seems pretty straightforward to me.

Q. I brought a buyer to a house, answered all his questions regarding the property, presented an offer on behalf of the buyer and brought about a meeting of the minds! The listing broker then put the transaction together without me or my office and we did not get paid! My broker and I want to sue the seller and the listing broker. Can we do that?

A. Article 17 of the Code of Ethics mandates that REALTORS® settle their commission disputes regarding the selling side of the transaction in an Arbitration at the Board instead of in a Court of Law. "In the event of contractual disputes...between REALTORS® associated with different firms, arising out of their relationship as REALTOR®, the REALTOR® shall mediate..."or arbitrate, in accordance with the policies of the Board rather than litigate the matter." In other words, REALTORS® are to settle such disputes at the Board rather than in Court!

Q. A REALTOR® put false and defamatory statements about me on a social media site. What can I do?

A. That REALTOR® may have violated Article 15 of the Code of Ethics, since the Article states, "REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices." You can make an Ethics complaint against that REALTOR®!