Real Estate is one of the few industries that has an enforced ethics code. Many other industries also have codes of ethics but they are for the most part aspirational and not enforced by any organization.
In the United States, about half of all Real Estate agents are certified by the National Association of Realtors (America's largest trade association). In addition, all Realtor members must complete the training on the Code of Ethics and are required to adhere to it to make sure they uphold certain professional standards.
The Code is updated periodically and the training requirements were just updated in 2019. In this article, we will go over what is the Code of Ethics training for realtors and the new requirements recently implemented.
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What is the National Association of Realtors Code of Ethics?
The National Association of Realtors (NAR) adopted the Code of Ethics in 1913 to establish a professional standard of conduct within the real estate industry. It is a way to ensure the public that when dealing with a Realtor, they can expect ethical, honest, and fair treatment relating to all transaction matters (agreements, documents, purchase, etc.)
Although the primary responsibility is to their client, the ethics code mandates never to withhold information or mislead any party involved in the real estate transaction (including any other Real Estate agents and their clients).
The Code of Ethics course consists of 17 articles covering the standard of conduct when dealing with the public in general, clients, and other Realtors. Here are some details on their ethical duties.
A Realtor must not deny services based on discrimination and should not provide false or misleading advertisements. They must provide clients with services that are only within a Realtor's professional scope (avoid recommendations about trades and services or arrangements for property repairs).
Their Clients and Customers
Realtors should always cooperate with each other as long as it is the client's best interest. There must be no exaggeration, misrepresentation, or hiding facts about the property in question, and all the documents referring to the real estate transaction presented must be in understandable terms.
Other Real Estate Agents
A Realtor should not appeal to any client that has already signed a listing agreement with another Realtor or Real Estate agent. In addition, they will not provide any false or misleading statements about another Realtor, and any contractual disputes must be mediated by the Realtor board of directors.
Licensed Real Estate agents who wish to be part of the National Association of Realtors must adhere to the NAR Code of Ethics and comply with the training requirements to ensure continuing education (CE course).
National Association of Realtors (NAR) Code of Ethics Training Requirements
Once a member of the National Association of Realtors, you must complete ethics training courses every certain amount of years. In November of 2019, NAR's board of directors approved a change to the ethics training requirements. Realtors are now required to take the training every three years instead of two years.
These changes were applied immediately, which means that the cycle ending on Dec 31, 2020, extended its deadline to December 31, 2021. Members are required to complete a minimum of 2.5 hours of ethics training.
The training material must meet the specific learning objectives and criteria established by the National Association of Realtors focusing on professional conduct, business etiquette, courtesies, and real-life scenarios.
What are the objectives of the Code of Ethics Training?
- To increase awareness of the key principles of the Code of Ethics
- Reinforce professionalism and competency
- Encourage participants to view the Code as their living, viable guide in daily dealings with clients, customers, and the public in general
- Appreciate the role that the Code can and should play in their professional lives
Certified Appraisers and commercial Real Estate agents must also complete the Code of Ethics requirement and the NAR offers specific modules geared towards those specific professions.
Associations have many training options in various formats, including webinars, videos, live classrooms, meeting presentations, and online courses as long as they meet the learning objectives and criteria.
What are the consequences for failing to complete the Training?
During the cycle dates established by the NAR, the training must be completed. The current cycle started on January 1, 2019, and will end this upcoming December 31, 2021.
If you do not complete the training within the given cycle dates you will be violating a membership duty and your membership will be suspended. The suspension will last for the first two months (January and February) of the year that follows the end of any 3-year cycle.
What happens after the suspension?
During your membership suspension, you may complete the ethics training requirement to automatically regain access to your rights, services, and privileges of being a Realtor. Keep in mind that, while suspended, you will still have the obligation to act according to the Code of Ethics, and to pay dues.
Suppose you do not complete your Realtor Code of Ethics training by March 1st of that year. In that case, the two-month suspension will be over and your membership with the National Association of Realtors will be automatically terminated.
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