Standard of Practice and Enforcement / Agency Law and Code of Ethics

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 Article 16

REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients. (Amended 1/04)

If you are mailing a postcard to a specific address and that address is listing with another broker then you may have a problem with this article unless you put on your postcard that this is not meant to be a solicitation for business if it is listed already. Talk to you broker about what the policy is regarding advertising.

Case #16-9: Mass Media Solicitation of Business Not a Violation of the Code

(Reaffirmed Case #21-15 May 1988. Transferred to Article 16 November 1994.)

REALTOR® A designed an advertising campaign to promote his new marketing program. Part of REALTOR® A’s campaign included a number of advertisements in the local newspaper and billboards placed at various well-traveled intersections around the city.

The message that appeared in REALTOR® A’s advertisements and on his billboards was: “Attention: All homeowners whose properties are for sale. Do you want results? If so, contact REALTOR® A. He has a new marketing program that gets results.”

In response to his advertisements, REALTOR® A received a number of calls from homeowners whose properties were currently listed with other REALTORS®. Several of the REALTORS® whose clients contacted REALTOR® A filed complaints with the Board, charging REALTOR® A with unethical conduct for failing to respect the exclusive agency of other REALTORS®. The Grievance Committee considered the complaints and referred them to the Secretary to schedule a hearing by a Hearing Panel of the Professional Standards Committee.

At the hearing held by the Professional Standards Committee to consider the complaints, REALTOR® A defended his advertising campaign by saying that the campaign was undertaken through the mass media; that it was not directed toward any particular owner; that it was not an attempt to induce property owners to breach existing listing agreements; and, therefore, was not the type of solicitation prohibited by Article 16 of the Code of Ethics.

The Hearing Panel concurred with REALTOR® A on the grounds that REALTOR® A’s solicitation was made through the mass media, and was not specifically directed toward property owners whose identity had come to REALTOR® A’s attention through information disclosed by other REALTORS® consistent with their ethical obligation to cooperate with other brokers under Article 3 of the Code of Ethics. The panel, therefore, held that REALTOR® A’s advertising campaign did not violate Article 16 of the Code of Ethics.

This is a good SOP to go over because it also states the process of this claim.

Realtors®  filed complaints with the Board. (The Ethics complaint does not go to the Department of Real Estate or ADRE as they  investigate violations of the real estate statutes and Commissioner’s Rules by licensed real estate brokers and salespeople.)

The Board sends it to the Grievance Committee who considers the complaint.

The Grievance Committee referrers them to the Secretary to schedule a hearing by a Hearing Panel of the Professional Standards Committee if they feel there is a violation.

The Professional Standards Committee decided is there is a violation and what the penalties are or not.

What are the steps,  enforcement and penalties against agents when they violate the Code of Ethics?

Steps for an Ethics complaint.

Ethics complaints must be filed within one hundred eighty (180)
days from the time a complainant knew (or reasonably should have
known) that potentially unethical conduct took place.

  • Write a detailed description of your complaint and send it to the board that the agent belongs to. Provide factual information, quotes, a location of where the incident occurred.
  • Provide legible copies of any paperwork evidence you have; including contracts, canceled checks, receipts, title documents, email correspondence between you and the realtor, and more.
  • Not all improper actions are illegal. However, they may be unethical.  If you believe a licensee acted or is acting in an unethical manner, you may want to file a complaint with the Arizona Association of Realtors.  Only Realtors are subject to the Code of Ethics.
  • Your complaint must cite one or more of the Articles of the
    Code of Ethics which may have been violated.
  • Your complaint will be reviewed by the AAR’s Grievance
    Committee. Their job is to review complaints to determine if the
    allegations made, if taken as true, might support a violation of the
    Article(s) cited in the complaint.
  • If the Grievance Committee forwards your complaint about a
  • The Grievance Committee refers the complaint to the
    Professional Standards Committee for a hearing.
  • You will receive the hearing panel’s decision in the mail.

Discipline has two purposes: to educate and to punish.  Any discipline imposed must be reasonable. The punishment should fit the offense.  Final ethics decisions holding REALTORS® in violation of the Code of Ethics must be forwarded to the state real estate licensing authority. Any discipline recommended by the Hearing Panel must be authorized in the Board’s professional standards procedures.

A discipline that may be imposed:

  • letter of warning [Section 23(j), Code of Ethics and Arbitration Manual ]
  • letter of reprimand
  • requirement to attend the ethics portion of the Board’s indoctrination course or another appropriate course or seminar specified by the Hearing Panel that Respondent could reasonably attend taking into consideration cost, location, and duration
  • fine not to exceed $5,000 (regardless of a number of Articles violated)
  • probation for one year or less
  • Suspension from Board membership for not less than 30 days, or more than one year (decision should be written clearly articulating all intended consequences, including denial of MLS participatory or access privileges).  Additionally, the Board of Directors has the option to allow the respondent to pay a fine (not in excess of $5,000) in lieu of suspension.  However, this option may be exercised only once during any given three-year period with respect to a particular member, and may not be offered as an option if the conduct giving rise to the suspension is a failure to arbitrate.
  • Expulsion from Board membership for a period of one to three years (decision should be written clearly articulating all intended consequences, including denial of MLS participatory or access privileges).
  • 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.

So if you do not want to be put in a situation where you are at risk of not being able to practice real estate, do what is right and honest. Disclose, disclose, disclose and always think about your clients best interests. The Association has the responsibility to enforce these standards of professional ethics and conduct. For monetary business disputes, this is accomplished through arbitration or mediation proceedings. For violations of the Code of Ethics, this is accomplished through disciplinary proceedings.


Quick Quiz

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Discipline has two purposes: to and to .

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