Good Ol’ Article 12 – We Thought We Knew You

Article 12 is the ‘truth in advertising” article and is frequently quoted by consumers who feel wronged in a Real Estate transaction.  As a reminder the Code of Ethics establishes an Article and then has “Standards of Practice” that better define the primary Article. 

From time to time, NAR will release a new Case Interpretation based on a scenario in question.  The most recently released  interpretation defines  Article 12 in saying that an agent who moves from one company to another may not advertise the production generated under a previous company.  Read the scenario below.

Article 12

REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional. (Amended 1/08)

Changes to the Interpretations of the Code of Ethics

•    New Case Interpretation #12-25, Advertising Role in Sales After Changing Firm Affiliation, was adopted as follows:

REALTOR® Q was a non-principal broker licensed with ABC, REALTORS®.  REALTOR® Q specialized in buyer representation.  A prominent feature on her website carried the headline “I sold these – and I can help you buy or sell, too!”.  Under the headline was a list of over a hundred street addresses of properties for which REALTOR® Q had found buyers.

For personal and professional reasons, REALTOR® Q chose to leave the ABC firm to affiliate with XYZ, REALTORS®.  As she transitioned to her new firm, REALTOR® Q was careful to disclose the name of her new firm in a readily apparent manner on her website.  Her website also continued to display the list of properties she had found buyers for during her time with the ABC firm.

REALTOR® Q’s parting with ABC had been amicable, so she was surprised to receive a complaint brought by her former principal broker, REALTOR® C, alleging a violation of Article 12, as interpreted by Standard of Practice 12-7, based on her website’s display of sales made while REALTOR® Q had been affiliated with ABC.

At the hearing, REALTOR® C, the complainant, noted that Standard of Practice 12-7 provides, in part,  “Only REALTORS® who participated in the transaction as the listing broker or cooperating broker (selling broker) may claim to have ‘sold’ the property.”  “It was ABC, REALTORS®,” REALTOR® C added, “that was the selling broker in these transactions, not our former sales associate REALTOR® Q.  Her advertising our sales under the umbrella of her new firm, XYZ, REALTORS®, is confusing at best, and potentially misleading to consumers who may get the impression the XYZ firm was involved in these transactions when that’s not the case.”

REALTOR® Q defended herself and her website arguing that the fact that she had found the buyers for each of the properties listed on her website was still true, and that the only thing that had changed was her firm affiliation.  “If it was true when I was licensed with ABC, then it’s still true even though I’m now licensed with XYZ,” she reasoned.

The hearing panel agreed that REALTOR® Q had, in fact, sold the properties, albeit while licensed with ABC.  The ad, however, suggested that the sales were made while the REALTOR® Q was licensed with XYZ, which was not the case.  Consequently REALTOR® Q was found in violation of Article 12.

Broker Reigns Supreme

This case study is yet another reminder that the transactions are performed under the brokerage.  It seems fairly often that agents forget that client and agency agreements are between the consumer and the Broker. 

There are many who would like to see this changed, but as of yet the agent is still the facilitator of the Broker’s business. 

I received a phone call today from the Grace Church Network asking me a position on a Missions Trip scheduled for the first week in May.  I’ve been looking for an opportunity to go and help.

I’ll be tasked with training those in Haiti on post disaster stress management.  Prior to Real Estate, I worked in emergency services and with Critical Incident Stress Management Teams.  Being able to work toward handling the after-effects of a tragedy is vitally important for survivors and workers. 

These trips are typically paid for by the individual going and I’m asking for help in offsetting the personal expenses.  I am hoping that I can count on you to contribute using the tool below.  Any money received in excess of what I need will be donated to the mission team sponsored by the Grace Network.