LEGAL CORNER: NYC Passes the FARE Act and Restricts the Payment of Commissions by Tenants
The real estate industry has expressed concerns regarding the potential repercussions of the FARE Act.
The real estate industry has expressed concerns regarding the potential repercussions of the FARE Act.
NAR continues to believe that offers of compensation are an important option to help make professional representation more accessible.
Starting out in her 20s, Rondon worked with real estate legend Faith Hope Consolo while at Garrick Aug Associates, where she spent 13 years.
(Editor’s Note: Part two of a two-part series)
In the first part of my “Stand and Deliver” column for Real Estate In-Depth published in the November edition, I noted that with the holidays fast approaching, it seemed an appropriate time to give a refresher on the need for Realtors to cooperate, show courtesy and to abide by the Code of Ethics.
In Part One I covered the Preamble to the Code of Ethics, key words and ideals that set Realtors apart from other licensees, Article 1, Showing Requirements and Rule Enforcement Facilitators.
One of the strongest Articles in the Code of Ethics is Article 3. It requires that “Realtors shall cooperate with other brokers except when cooperation is not in the client’s best interests.” It doesn’t say “may cooperate” or “should cooperate,” it says “shall cooperate.” That is tantamount to MUST cooperate. This cooperation extends to any licensed real estate agent, not just Realtors or members of our association or OneKey MLS participants. It applies to ALL licensees. Cooperation can be many things. It can be:
The most common offenses are relating to showings. As noted above, timing for a showing is crucial. Realtors have only an hour or two to confirm showings. Realtors must be diligent and responsive; otherwise, not only might they be fined by a Facilitator, but they might also be brought up on Article 1 and Article 3 violations. Worse still, discrimination claims might be leveled if the agent/party requesting the showing are part of a protected class. Such claims of discrimination may raise an Article 10 violation, as well as state or federal discrimination claims. Regardless of whether you successfully defend yourself, all these things can result in time spent filing paperwork, speaking with legal or Realtor counsel, hearings and lawsuits and less time focused on your profession. They distract and consume your time and finances. It is best to simply respond timely. Cooperate.
With regard to “Coming Soon” listings, ensure that no one is permitted to enter the property under any circumstances. That would be a blatant violation of Article 1 and Article 3. With office exclusives, ensure that if a licensee requests a showing, they are immediately scheduled; simply because a property is an office exclusive does not mean that a Realtor does not have to cooperate.
As a cooperating Realtor, make sure you show up on time. No Realtor is permitted to enter a property outside of the scheduled time. To do so is criminal trespassing and you may be speaking to the police, as well as finding yourself at a Professional Standards hearing. Do not enter a property outside of the scheduled time.
Do not schedule a showing and then send only the buyers/tenants or send another Realtor in your place. When you schedule a showing you are agreeing to be present at the showing and comply with the showing instructions. If you do, you not only expose yourself to violating Article 3 (SOP 3-9), but you also expose that other Realtor who shows the property as well. And if no Realtor is present and only the buyers/tenants appear, then you expose them to criminal charges of trespassing and potentially expose you and your brokerage to litigation if something on the property goes missing or is damaged. Simply put, comply with the showing instructions and be present.
During these times of COVID, ensure that you abide by any showing protocols concerning the production of COVID forms, mask wearing, wiping down surfaces, and the maximum amounts of people allowed inside. Not only can a Realtor violate the Code by failing to comply, but you are risking people’s lives.
Ensure that all offers are timely presented. This means, present them objectively and as soon as possible. A Realtor cannot hold off on presenting offers based on their personal convenience (for example, an agent goes away for a long weekend and waits to present the offers or holding all offers until after an open house). Unless the owner has instructed the agent to do this, it’s a violation of the Code.
If an agent requests an executed Offer Acknowledgement Form, or a Sworn Declaration Statement that an offer has been presented, you MUST respond timely. Again, failure to do so may result in fines and/or a hearing for Article 1 and Article 3 violation. Don’t make the mistake of ignoring such a demand, hoping that it’ll just go away. Cooperate with your fellow real estate agents. Same goes for a demand to be present for an offer presentation (OneKey Rule 405.4). Unless instructed by your client, you must arrange for that agent to be “present” (in person, on the phone, cc on e-mail, etc.) when that offer is presented.
Cooperation is simple. Quite often, the claim that a Realtor is not cooperating is a result of an accumulation of delays, non-responses, halfhearted communications and neglect. All Realtors must timely communicate, as it’s in the best interests of their clients. Providing keys for a non-member or assisting with access is required. Assisting with showings is required. Providing current and accurately required documentation is required. The list goes on and on; however, much of it is common sense.
Cooperation’s foundations are in the Preamble. As Realtors we hold ourselves out as consummate professionals and experts in our field. Failing to abide by these principles damages all Realtors and what we stand for. We can’t raise this weighty bar if everyone isn’t lifting it. Realtors need to acknowledge their responsibility and, in turn, identify those that fail to cooperate, those that fail to lift the bar. Realtors need to cooperate and Stand Up and Deliver.
Article 10: Discrimination
I don’t think much needs to be said here. The language is clear, and the lawsuits are coming in fast and furiously: “Realtors shall not deny equal professional services for reasons of race, color, religion, sex, handicap, familial status, nation origin, sexual orientation or gender identity.” This applies to your treatment of members of the public, as well as other real estate professionals. Realtors should treat all people equally. Not only can you violate the Code, but you can be found in violation of state and federal law too.
There’s an old saying that “the road to hell is paved with good intentions.” As Realtors, we often try to help clients find what is best; however, in doing so, we forget to ask the client what they want. Never assume a person of color wishes to live where other persons of color reside. Same goes for religion, national origin, and those with other obvious and visible factors. Don’t assume that a family with young children or someone that is elderly doesn’t want to live near a busy highway. Always ask what someone’s preferences are. Document them and then do your research.
Recently added to Article 10 is SOP 10-5. This rule prohibits the use of “harassing speech, hate speech, epithets, or slurs based on race, cold, religion, sex, handicap, familial status, nation origin, sexual orientation or gender identity.” In promulgating this rule, NAR determined that this rule would apply to all Realtors during all their activities, not just their activities related to real estate. While some might argue that this is a violation of their First Amendment rights, legal professionals have indicated that this is not the case. As a voluntary association, member can choose to belong. If they do, they must comply with the association rules. If not, they can choose to disassociate, or their membership can be terminated. What is clear is that Realtors must hold themselves to a higher standard. Discrimination, in any form, is unacceptable and runs in the face of what the Preamble establishes. All Realtors must identify offenders and report them, not only to the association but to the local, state, and federal authorities. Realtors must Stand Up and Deliver.
Article 15: False/Misleading Statements
The final Article that we’ll address relates to Realtor conduct. Article 15 asserts that “Realtors shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices.” The old adage is that “If you don’t have something nice to say, don’t say anything at all,” and that seems to apply here. Realtors should avoid disparaging other Realtors. There is no benefit from it, and it only goes to promoting self-interests. “If a Realtor is engaging in transgressions, after confirming such actions, that Realtor should be reported. Careless, reckless restatements about what may have been heard, or restating what was assumed were facts without confirmation should be avoided at all costs. Restating or republishing false statements is a violation too.
To those agents that are quick to cut, quick to criticize, comment or disparage, be cautioned: you will be called out and held accountable because Realtors will Stand Up and Deliver.
Conclusion
In today’s challenging environment, it seems OK to do whatever is necessary to get ahead; to make a few more deals, obtain a few more clients, make a few more dollars. Machiavelli said, “the end justifies the means.” But that is not true. What suffers is integrity. What is lost is reputation and trust from the public. Being a Realtor means something special. It’s an honor, a duty, a responsibility. Cooperation and courtesy are the cornerstones of being a Realtor. Without them, the reputation falls away, the confidence is gone. Realtors owe it to themselves and to the association to which they belong to rise, stand tall, identify wrongs, and require all Realtors to abide by the Code we chose to embrace. It’s time to Stand Up and Deliver.
Brian S. Levine, Esq. is General Counsel and Professional Standards Administrator for the Hudson Gateway Association of Realtors.
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