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Ethics

Changing the Code

REALTORS Complain About the Code

Timeless and Universal? Image Courtesy of Creative CommonsIt’s too harsh or restrictive – or its not restrictive enough. Its enforced too harshly, or not harshly enough. There always seems to be some issues about the Code of Ethics. The first Code of Ethics was published in 1913, five years after the founding of the National Association of REALTORS. It has been changed numerous times and has had as many as 34 Articles, though currently there are only 17 (and only one of those deals with money disputes).

The Code has survived so  long, and been as effective as it has, because the Code is a living document, reviewed and modified every year. And in that process the voice of any member can be heard.

So How Does it Work?

Anyone can initiate a change in the code, or an issue for the consideration of The Professional Standards Committee. Often it starts with someone standing up at the Professional Standards Forum, a meeting open to all members, which takes place immediately before the Professional Standards Committee meeting at the Mid-Year meeting in Washington and the Annual Meetings in November. The Forum has an agenda created by the Volunteer leadership and the Staff, but they exist to solicit information from members about what their concerns are.

Those members who do not attend these meetings can always send a letter directly to the Professional Standards Committee at NAR’s headquarters in Chicago. Sometimes letters will come from local or state associations who have a concern either about the Code, the standards of practice, or the enforcement of the code.

Then What Happens

Once the item is brought before the committee, if it warrants further consideration, it is referred to the Interpretations and Procedures sub-committee, sometimes called the small committee. Chaired by the immediate past chair of the Professional Standards Committee (sometimes called the large committee) , this group discusses issues that will be presented to the large committee at their twice annual meetings.

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The small committee does the wordsmithing and discusses new issues, to help develop the agenda of the large committee. It does not however have the authority to act without the approval of the full committee, which includes members from every state in the union. The small committee (which meets in March and September in Chicago) will frame the items to be brought to the large committee with their recommendations.

Once the times have been framed for the agenda, the large committee will either defeat the recommendation, send it back to the small committee for further work, or pass the recommendation (possibly with changes from the floor).

If the item passes, then the real fun begins.

NAR’s Leadership Team

After an item has been recommended by the Large Committee, the Chairman of the Professional Standards Committee has the job of presenting the recommendations to the Executive committee. The Executive Committee meets the day before the Board of Directors. They will hear the recommendation an its rationale, and either decide against the recommendation and send it back to committee, or approve it and send it forward to be approved by the Board of Directors.

Though presenting to the Leadership team of NAR is intimidating, presenting in front of the all of the directors of NAR is as daunting a task. The committee chair presents the recommendation to the Board where it is discussed yet again, and either sent back to committee for further consideration, defeated or approved. If approved, the matter is published and distributed to the members. And that dear REALTORS is how the changes are made to the Code of Ethics, the Standards of Practice, and the manner in which they are administered.

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Photo Credit: Ethics and Morals- Timeless and Universal? Image Courtesy of Creative Commons

Written By

Bill is an unusual blend of Old & New - The CEO Century 21 Advantage Gold (Philadelphia's Largest Century 21 company and BuzzBuilderz (a Social Media Marketing Company), He is a Ninja CEO, blending the Web 1 and 2.0 world together in a fashion that stretches the fabric of the universe. You can follow him on twitter @Billlublin or Facebook or LinkedIn.

18 Comments

18 Comments

  1. Steve Simon

    November 26, 2008 at 12:35 pm

    The local Board here went from 1600 to 1400 to 800 and half of them are late with their dues (that from the local Board Pres.)…
    They are not interested in enforcing anything, they are interested in collecting money to survive.

  2. Mike Farmer

    November 26, 2008 at 1:38 pm

    I’m getting ready to quit our board. Does this mean I can become unethical?

  3. Monika

    November 26, 2008 at 3:59 pm

    You’ve done such an awesome job as committee chair that I can truly say it’s been a pleasure being one of your committee members.
    Excellent explanation of the process Bill!

  4. Bill Lublin

    November 26, 2008 at 4:41 pm

    @steve Simon whether a local association is having a tough time making ends meet or not, being concerned about doing business the right way should be a priority – shame for the consumers if its not..

    @Mike You can be as ethical or unethical as you wish – its your conscience- But I always looked at the dues we pay as part of the price for taking up space in the industry. Then again I always made enough of a living that paying my dues wasn;t my biggest issue in any market…

    @Monika – Its because of the contribution of committee members like you that I could do that job at all – Thank YOU for your service
    😉

  5. Danilo Bogdanovic

    November 26, 2008 at 5:35 pm

    Thanks for the great and detailed explanation of the process Bill!

    It would be nice if we could just put up a poster of the Spike Lee flick “Do the Right Thing” and call it a day…

  6. Jim Gatos

    November 27, 2008 at 9:11 am

    I have no problem in “subscribing” to a code of ethics..

    However in the “real” world, it’s a royal pain to call another agent up against ethics charges, it costs money just to file, and it’s potentially embarressing, no matter who’s right or wrong. Personally, I have NO problem witn the code itself, I just can’t understand WHY my board of realtors forces me to join the board of realtors my individual office and manager is a member of (so there are no more “virtual” real estate boards?), and why their charges went up.. (New building? Less members?). I asked 3 times myself; still waiting for an answer.. They even made a couple of “lame” attempts to get membership dues early by offering a little cut and a drawing for a free membership…

  7. Bill Lublin

    November 29, 2008 at 5:11 am

    @Danilo – I think the Code is pretty much like Spike Lee’s advice 😉

  8. Bill Lublin

    November 29, 2008 at 5:18 am

    Jim; I operate a company in the real world, and have never found it a problem to make a complaint against an agent who is doing something unethical. As the English philosopher Edmund Burke said ‘The only thing necessary for the triumph [of evil] is for good men to do nothing.’
    And I don’t experience any embarassment in the complaint or the process.

    As far as the budget issues of your association, I don’t know anything about them and really can’t comment, except to point out that if you participate in the association, you get input on those decisions. Regarding the association your broker belongs to, in our area, since my company is a multi-state company, I belong to several assocations so that my associates can chose where they wish to belpng. You might wish to talk to your broker about that if you have a strong reason to belong to one association rather than another. And I don;t undertans the virtual assocation concept. Local associations have importnant local functions revolving around community activism and legislation 0 but that’s a matter for a different post and discussion.

  9. Danilo Bogdanovic

    November 29, 2008 at 3:48 pm

    Bill – Yeah, but “right” to you and I may be different than “right” to someone else.

  10. Mike Farmer

    November 30, 2008 at 9:51 am

    Uh, Bill, I was just joshing. I’ll try to be more, like, serious minded next time.

    But since we’re being serious, I’m quitting the board, not because I can’t pay the dues, but I no longer need the board and it offers no value. I’ll be ethical with or without a board or a code of ethics.

    I do mostly investments now.

  11. Bill Lublin

    November 30, 2008 at 2:09 pm

    @danilo – And that’s why we have the code Mookie!

    @Mike Sorry if I get to serious about this stuff, but it is so important to people who need to be representing the interests of others and cooperate with each other. Sorry that piece of your career is going away, but best of luck with your investment career.

  12. Teri L

    November 30, 2008 at 5:02 pm

    MIKE!!!!!

    Oh my gosh, thanks for that. 😀

  13. Mike Farmer

    November 30, 2008 at 6:44 pm

    TERI!!!

    “Sorry that piece of your career is going away, but best of luck with your investment career.”

    No need to express sorrow, it’s a glorious development from my perspective. Investment is the best way to make money in this business. I started investing years back, and now it seems like the way to go permanently — many good deals in the market, and rentals are strong.

  14. Bill Lublin

    December 1, 2008 at 4:18 am

    Mike – I spend a pretty good chunk of time investing also, and I agree with you that investing is a great opportunity to accumulate wealth, especially in this market. For me it was an addition, not a substitution

    The sorrow was actually not only for you but also for the people that won’t be getting the benefit of your expertise, and the sector of the business that loses your contribution…

  15. Ginger Wilcox

    December 3, 2008 at 11:24 am

    Thanks for the explanation of the process. I think it is really important for people who have complaints about the process to get involved and do their part to make it better.

    As for the Code of Ethics- it is crucial to our business. While there are people who don’t abide by the code, can you imagine what the business would be without it?

  16. Dan Homan

    May 29, 2009 at 9:23 am

    The problem is theleadership team itself. The system of shoosing leadershio on the self appointed and inbread methosd stinks for us in the real world who have a clue about what is going on in the market place and on he internet.

    The NAR leadership constantly violates the COE with a nod and a wink in their daily practice of real estate.

    Two quick examples. 1- Advertise your listings with postlets or the real estate book, let them sendyour listings to as many websites as they can, many scrub them clean of broker information – in vilation of COE and most state licence law – nod nod, wink, wink. 2 – Or try this hire an economist who paints a rosy picture of a market in the tank (the previous economist had to change employment when he had the brass to predict a 2.5% decline in the market when the majority of economists were talking 10% decline to or even melt down). Use the words of your paid patsy economist as the basis for advertising – knowing that since you are atributing this info to an “expert” you are not really violating the COE with your advertisng by intentionally misleading people about the values of their homes. And lets throw in the disclaimer about all real estate is local – nod nod wink wink.

    If the leadership does not recognise their ethical responsibilities, all they are going to use the COE for is to contol the unruly masses who pay dues to support their power games and ego.

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