Ethics and Arbitration Services
Formal & informal processes to resolve disputes
October 14th at 10:02am.
Not all real estate licensees are REALTORS®.
Only real estate licensees who are members of the National Association Of REALTORS® may use the term REALTOR®.
REALTORS® subscribe to a strict code of ethics. The Code of Ethics defines a level of professionalism and responsibility in how REALTORS® conduct their business that sets them apart from other real estate practitioners.
The Code was first adopted by the National Association of REALTORS® in 1913 and has been revised over the years to reflect current developments in the professional practice of real estate. Boards and associations of REALTORS® are responsible for enforcing the REALTOR® Code of Ethics.
Many ethics complaints result from a misunderstanding or failure in communication. Before filing an ethics complaint, make reasonable efforts to communicate with your real estate professional or a principal broker in the firm. If these efforts are not fruitful, the local board or association of REALTORS® can give you the procedures and forms necessary to file an ethics complaint.
The Preamble to the Code of Ethics
"In recognition and appreciation of their obligations to clients, customers, the public, and each other, REALTORS ® continuously strive to become and remain informed on issues affecting real estate and, as knowledgeable professionals, they willingly share the fruit of their experience and study with others. They identify and take steps, through enforcement of this Code of Ethics and by assisting appropriate regulatory bodies, to eliminate practices which may damage the public or which might discredit or bring dishonor to the real estate profession. REALTORS® having direct personal knowledge of conduct that may violate the Code of Ethics involving misappropriation of client or customer funds or property, willful discrimination, or fraud resulting in substantial economic harm, bring such matters to the attention of the appropriate Board or Association of REALTORS®."
Since the adoption of the Code of Ethics of the National Association in 1913, thousands of hearings have been conducted by REALTORS® in the interest of protecting the public. Ethics complaints brought before NSR are treated with absolute sincerity and handled by the process dictated in the Code of Ethics and Arbitration Manual from the National Association of REALTORS®. The objective of this process in each case is to promote honesty, integrity, fairness, and competency, and to resolve controversies on the basis of the informed judgment of one’s peers.
For a more expeditious, informal process to dispute resolution without having to file an Ethics Complaint see the Ombudsman Program below.
The Ombudsman Program in its simplest definition is informal telephone mediation. It can quickly solve REALTOR® to REALTOR® conflicts before they become serious problems. Like a mediator, an ombudsman is a neutral facilitator that helps parties find solutions.
The NSR Ombudsman will make all necessary contacts in an attempt to resolve the complaint. If the Ombudsman efforts are effective, there is no further action necessary. If the efforts are not successful in resolving the Complainant’s issues, the Ombudsman will advise the Complainant about the next step(s) in the complaint process.
This free program is available to NSR members, their clients, and customers. Click here to view the Ombudsman Brochure.
Arbitration services for REALTOR® to REALTOR® monetary disputes is a valuable service provided to brokers by NSR. Arbitration services ensure that the disputes will be judged by peers with a better understanding of the real estate industry than most other adjudicators. Arbitration is also a financially prudent method of dispute resolution by avoiding litigation and court costs.
The Code of Ethics requires that REALTORS® file a request for arbitration before they litigate. Find out how to file an arbitration request.
For a more expeditious process of resolution in business disputes see Mediation below.
NSR offers mediation as a dispute resolution alternative once an arbitration request has been reviewed and found to be an arbitrable matter by the NSR Grievance Committee. Mediation is a confidential, non-adversarial process in which a trained neutral facilitator meets with the parties involved in a conflict and helps them reach a mutually acceptable agreement. The resolution facilitator helps the parties narrow the issues, identify their individual needs, and explore possible ways of resolving the conflict to their mutual satisfaction.
The facilitator meets with the parties separately and jointly during the process. In the private sessions, information shared is not disclosed to any party without the permission of that party. In essence, mediation is a risk-free resolution process in which the parties have an opportunity to settle their dispute in a timely fashion through assisted negotiation. If voluntary, mutually-agreeable terms are not reached through the mediation process, the parties' right to arbitrate the dispute is preserved.
To find out more about mediation, download our Mediation Information Packet for Brokers.
If you have questions regarding any of the above Professional Standards processes, please call the NSR offices at (978) 232-9410.