Preface to the Twenty Fifth Edition of Interpretations of the Code of Ethics

The Code of Ethics of the NATIONAL ASSOCIATION OF REALTORS® establishes a public and professional consensus against which the practice and conduct of REALTORS® and REALTOR-ASSOCIATE®s may be judged. In joining a Board of REALTORS® , REALTORS®, and REALTOR-ASSOCIATE®s 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® throughout the country.

Interpretations of the Code of Ethics has been developed by the Professional Standards Committee of the NATIONAL ASSOCIATION OF REALTORS® to help REALTORS® and REALTOR-ASSOCIATE®s understand the ethical obligations created by the Code of Ethics, and as a reference work for Grievance Committees, ethics and arbitration Hearing Panels, and Boards of Directors.

Interpretations of the Code of Ethics presents specific situations involving charges of alleged unethical conduct by REALTORS® and/or REALTOR-ASSOCIATE®s, which are reviewed by a peer panel of Board Members and in which decisions as to ethical conduct are reached. Each case provides the Hearing Panel’s decision based on the facts and the rationale for the decision, but does not specify a specific sanction or discipline to be imposed. There are two reasons for this. First, any sanction imposed must always fit the offense and must involve every consideration of justice, equity, and propriety. Second, a Hearing Panel may base its recommendation for discipline on a Member’s past record of ethics violations.

For this reason, the Code of Ethics and Arbitration Manual establishes that a Member Board may utilize a wide range of sanctions for ethics violations. These sanctions include:

(a) Letter of Warning with copy to be placed in Member’s file; (b) Letter of Reprimand with copy to be placed in Member’s
file; (c) Requirement that Member attend the ethics portion of the Board Indoctrination Course or other appropriate course or seminar specified by the Hearing Panel, which the respondent could reasonably attend taking into consideration cost, location, and duration; (d) Appropriate and reasonable fine not to exceed $5,000; (e) Member placed on probation for a stated period of time not less than thirty (30) days but no more than one (1) year; (f) Membership of individual suspended for a stated period not to exceed one (1) year, with automatic reinstatement of membership in good standing at the end of the specified period of suspension (decision should be written clearly articulating all intended consequences, including denial of MLS participatory or access privileges). The Directors may order suspension unconditionally, or they may, at their discretion, give the disciplined member the option of paying to the Board, within such time as the Directors shall designate, an assessment in an amount fixed by the Directors, which may not exceed $5,000 and which can be utilized only once in any three (3) year period, in lieu of accepting suspension. But, if the conduct for which suspension is ordered consists of failure to submit a dispute to arbitration, the Directors may not permit the disciplined member to avoid suspension without submitting to the arbitration in addition to paying the assessment, unless in the meanwhile the dispute has been submitted to a court of law without any objection by any party that it should be arbitrated; (g) Expulsion of individual from membership with no reinstatement privilege for a specified period of one (1) to three (3) years, with reinstatement of membership to be by application only after the specified period of expulsion on the merits of the application at the time received (decision should be written clearly articulating all intended consequences, including denial of MLS participatory or access privileges); (h) Suspension or termination of MLS rights and privileges may also be utilized. Suspension of MLS services may be no less than thirty (30) days nor more than one (1) year; termination of MLS services shall be for a stated period of one (1) to three (3) years; (i) REALTORS® who are not members of a Board from which they purchase the multiple listing service and their users and subscribers remain obligated under the Code of Ethics on the same terms and conditions as REALTORS® and REALTOR-ASSOCIATE® members of that Board. Discipline that may be imposed may be the same as but shall not exceed the discipline that may be imposed on that Board’s members. Boards entering into regional or reciprocal MLS agreements are encouraged to include provisions requiring signatory Boards to respect, to the extent feasible, decisions rendered by other Boards involving suspension or expulsion from membership or from MLS. (Revised 5/02)

In addition to any discipline imposed, Boards and Associations may, at their discretion, impose administrative processing fees not to exceed $500 against respondents found in violation of the Code of Ethics or other membership duties. Any administrative processing fee will be in addition to, and not part of, any disciplinary sanction imposed. Boards and Associations are encouraged to determine in advance when, and under what circumstances, administrative processing fees will be imposed so that imposition is a matter of administrative routine. (Revised 11/98)

While Boards of REALTORS® have wide latitude in the sanctions which may be imposed for violations of the Code of Ethics, they must always act responsibly in the application of these sanctions, attempting to make the punishment commensurate with the offense. The mildest forms of sanction, a Letter of Warning or a Letter of Reprimand, would generally be the appropriate sanction for first offenses, except in cases involving gross or willful misconduct. Where ignorance of the Code of Ethics is involved, the Board may find that requiring the Member to attend a course or seminar reviewing the Code of Ethics and its interpretations to be the most appropriate sanction.

Interpretations of the Code of Ethics is formatted to provide the reader with information on each Article of the Code of Ethics and its interpretations in sequence. Interpretations of the Code of Ethics contains citations to Case Interpretations which were deleted, amended, or adopted as a result of the work of the Interpretations Subcommittee in 1986–2000, providing a complete historical record for the reader. All new and amended Case Interpretations become effective upon approval by the National Association’s Professional Standards Committee and publication on

Article 1

Article 2

Article 3

Article 4

Article 5

Article 6

Article 7

Article 8

Article 9 – N/A

Article 10

Article 11

Article 12

Article 13

Article 14

Article 15

Article 16

Article 17

About the Author

Michelle Lind

K. Michelle Lind, CEO of Arizona REALTORS®, is also an attorney, State Bar of Arizona board certified real estate specialist, and the author of Arizona Real Estate: A Professional’s Guide to Law and Practice. Please note that this article is of a general nature and may not be updated or revised for accuracy as statutory or case law changes following the date of first publication. Further, this article reflects only the opinion of the author, is not intended as definitive legal advice and you should not act upon it without seeking independent legal counsel.