The Code of Ethics is turning 100 in 2013!  Perhaps you already knew that, but did you know the privilege to invoke arbitration existed in the 1913 Code of Ethics and that privilege has remained in the Code for the last century?  The celebration of the centennial will kick off at the National Association’s Annual Conference & Expo November 7-12, 2012, and will continue through 2013.  If you have ideas about how AAR can celebrate the centennial, send us an email at ethics@aaronline.com!ACCEPTED OFFERS MUST BE DISCLOSED 
“Don’t confuse the requirement to disclose an accepted offer from the rules on when disclosure of unaccepted offers is required. Disclosure of offers not yet accepted is covered by Standard of Practice 1-15. “REALTORS® in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval, disclose the existence of offers on the property.”  Read More at:   
realtormag.realtor.org/law-and-ethics/ethics/article/2012/09/accepted-offers-must-be-disclosedGRIEVANCE COMMITTEE REVIEW – NON-REAL ESTATE-RELATED ACTIVITIES 
As you review an ethics complaint to determine if, “taken true on its face,” the conduct of the REALTOR® was potentially unethical, be careful to determine whether or not the issues complained of relate to real estate-related activities.  Article 1, Standard of Practice 1-1 states: “REALTORS®, when acting as principals in a real estate transaction, remain obligated by the duties imposed by the Code of Ethics.”   However, Policy Statement 29 – Applicability of the Code of Ethics to non-real estate-related activities states: “while REALTORS® are encouraged to follow the principles of the Code of Ethics in all of their activities, a REALTOR® shall be subject to disciplinary action under the Code of Ethics only with respect to real estate-related activities and transactions involving the REALTOR®.”HEARING CHAIR CONSIDERATION OF A REMOTE TESTIMONY REQUEST 
In “extreme circumstances” parties and their witnesses may participate by teleconference or videoconference in ethics and arbitration hearings at the discretion of the Hearing Panel Chair. (CEAM, Policy Statement 56). A party requesting to present remote testimony must provide the reason for the request in writing and bear any costs associated with remote testimony.
AAR’s Professional Standards Administrator will advise the Hearing Panel Chair of the request, any response from the adverse party and the local association’s teleconference and videoconference capabilities.  In determining whether to allow the remote testimony, the Hearing Panel Chair should consider whether the circumstances demonstrate that postponement or rescheduling the hearing is not feasible and whether the refusal to permit the remote testimony will deny a party a fair hearing. If the remote testimony is permitted, the Professional Standards Administrator will advise the requesting party and if a witness is appearing remotely, the witness will participate in a hearing just as a witness in  physical attendance would participate:

  • The witness must be available at the beginning of the hearing for the reading of the script
  • The witness will be excused at the appropriate time
  • The witness must remain available and return to present their testimony.

There are times during a hearing when you have a question. Write that question down and after the party finishes their testimony, ask the Hearing Panel Chair for an Executive Session break. Present your question to the Hearing Panel first for discussion. The parties may observe the break positively because it shows that you are paying attention.
Hearing Panel members should avoid being “flip or frivolous or sarcastic in their words and gestures.” They should not attempt to be “casual” in their approach, and they should carefully avoid any reflection of partisanship in their questioning or observations. They should not preach or teach, but should let the findings and recommendations of the hearing panel serve to educate the parties and the membership, as well as vindicate the Code and its purpose. (NAR Professional Standards Training Manual, 1995)

As a mediator, you have certain obligations to the parties, such as:

  • Honor self-determination of the parties to reach their own conclusions:  Assist parties in moving forward if they become stalled, suggest possible options if the parties are not able to articulate any. Empower the parties to reach a conclusion through a discussion of possibilities.
  • Be competent and remain impartial:  Brush up on mediation techniques prior to a meeting, if necessary. Remember both sides are evaluating your language and demeanor.  Do not come across as if you are favoring one party over the other. Be the professional in the room!
  • Abide by confidentiality:  Never, ever, discuss the mediation. Do not discuss the parties involved in a mediation, or outcome of a mediation – NEVER, EVER!
  • Maintain the quality and integrity of the process:  Take control of and keep control of the room. Do not allow a party to take over or “hijack” the meeting.
  • Complete paperwork in a professional manner:  Take a break, allow yourself time to think through the resolution prior to committing it to writing. Connect the dots, follow – who, what, when and where in the resolution. Once written, read it out loud – has the intent of the agreement been captured?  Ask the AAR Risk Management Specialist to review the agreement, if possible, to make sure nothing is unclear or omitted that could jeopardize the agreement.

Take a look at the new mediation “infomercial” describing the process, expectations and results of mediation at https://www.aaronline.com/resolve-disputes/!

In responding to some Ombudsman requests, you may not get to the true issue of the complaint until you have had a conversation with the complainant.  During your conversation you may determine that the issues may fall ‘outside the scope’ of the Ombudsman process, (i.e. possible violation of public trust, legal issues, too complex, specialty fields).  Anytime you feel uncomfortable with the issues being raised, do not hesitate to call and discuss your concerns with the Professional Standards Coordinator, who can  consult with AAR legal counsel if necessary to determine how best to proceed.  There are times when the Ombudsman process should be terminated and the parties advised of their rights to pursue a formal ethics complaint; a complaint with any appropriate governmental or regulatory agency; litigation; or any other available remedy.

The morning session will be lead by Alona M. Gottfried, Esq., of Simmons & Gottfried, PLLC, a mediator, attorney, and conflict resolution trainer. The afternoon session will be broken into two groups: Jan Steward and Carole Ridley will be joining the Mediator afternoon discussions and Kimberly Franzen and Michelle Lind, Legal Counsel for AAR, will be joining the Ombudsmen afternoon discussions. Registration is at 8:30am and the program is scheduled from 9:00am-2:30pm at the Arizona Association of REALTORS®, 1st Floor Meeting Center.  R.S.V.P. by:  October 12, 2012.

Have you been assigned to a review a complaint or sit on a hearing panel regarding an Article of the Code of Ethics? Now you can view the NAR video relative to the Article  either online or downloaded to your PC or other “on the go” equipment, there’s simply no excuse to be without the valuable information provided by NAR on the Code of Ethics. The Code of Ethics video series is available at:  www.realtor.org//videos/code-of-ethics-pathways-to-professionalism-video-series

AAR was contacted about how a real estate agent had written a short sale contract for a buyer. The story was described as follows:
A buyer and seller agreed to a purchase price on a short sale property of $150,000. Approval was received from the seller’s creditor for a sales price of $153,500. The buyer’s agent was asked to write a new contract or addendum showing the creditors approved purchase price of $153,500. The agent said he was not changing the sales price, instead he was writing an addendum, stating that the seller was contributing $500 towards the payoff and the buyer would contribute $3,000 toward the payoff at COE.
Representing the sale in this manner raised concerns that there could potentially be valuation fraud.  Read Jan Steward’s article on this scenario at:https://blog.aaronline.com/2012/09/short-sale-practices-and-professionalism/

The Arizona Real Estate book is available at: at https://www.aaronline.com/azre-book/.  Want the book on your computer, Kindle or iPad so you can search, cut & paste?  Learn how in this two minute video: www.youtube.com/watch?v=6VBZ855KCfg.


Beginning November 2012, and throughout 2013, look for “Code Talk” a monthly column which will appear in the AZR kicking off AAR’s celebration of 100 years of the Code of Ethics! We are seeking volunteers who would like to tell others about how the Code of Ethics is involved in the everyday practice of real estate. For those who wish to participate please contact Jan Steward at JanSteward@aaronline.com.

Did you miss the last update? View the archives.

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.