The Professional Standards Process and REALTOR® Code of Ethics
As of January 1, 2023, the Massachusetts Association of REALTORS® is responsible for the enforcement of the REALTOR® Code of Ethics – © 2023 NATIONAL ASSOCIATION OF REALTORS®, All Rights Reserved. This Code establishes obligations that may be higher than those mandated by law and only REALTORS® are subject to the higher standards of the Code of Ethics of the National Association of REALTORS®.
Many times difficulties between real estate professionals (whether REALTORS® or not) are the result of a misunderstanding, miscommunication or lack of adequate information/communication. If you have a problem with a real estate professional, you may want to speak with them or with a principal broker in the firm. Open, constructive discussion often resolves questions or differences, eliminating the need for further action. If you have taken these steps and still feel you have a grievance, you may want to consider filing an ethics complaint.
Consider the following information before filing:
- If the real estate professional you are dealing with is not a REALTOR®, your only recourse may be the state real estate licensing authority or a court of law.
- Boards and Associations of REALTORS® determine whether the Code of Ethics has been violated (not whether the law/real estate regulations have been broken – the licensing authorities or the courts can only make those decisions).
- Boards and Associations of REALTORS® can discipline REALTORS® for violating the Code of Ethics. Typical forms of discipline can include mandated attendance at courses/seminars (designed to increase the understanding of ethical duties or other responsibilities), a reprimand, a fine, or suspension or termination of membership for serious or repeated violations. Boards/Associations of REALTORS® CANNOT require REALTORS® to pay money to parties filing ethics complaints; cannot award “punitive damages” for violations of the Code of Ethics; and cannot suspend or revoke a real estate professional’s license.
Please contact the MAR Director of Professional Standards & Association Counsel Kate Berard at firstname.lastname@example.org if you have any questions. Detailed information, including links to documents, can be found here: https://www.marealtor.com/dispute-resolution-realtors/.
Arbitration, a form of alternative dispute resolution (ADR), is a legal technique for the resolution of disputes outside the courts. The parties to a dispute refer it to one or more persons (the “arbitrators”, “arbiters” or “arbitral tribunal”) on whose decision (the “award”) they agree to be legally bound (for both sides). A request for Arbitration must be filed: 1) after the real estate transaction giving rise to the dispute has been completed; 2) within six months (180 days) after the facts constituting the Arbitration matter could have been known in the exercise of reasonable diligence; 3) by the broker of the real estate agency.
Mediation vs. Arbitration
Mediation is NAR’s preferred method of resolving disputes. While Arbitration can be time-consuming and costly, there is another choice… mediation, which is a simpler and easier process. It is an efficient and economical mechanism to resolve arbitration disputes.
With mediation there is no cost, little delay, no hearing panel, use of one or two neutral/impartial mediators and the solution is just as binding and enforceable as arbitration. Both parties decide to enter the process, can leave the process at any time (at which time a hearing can be convened). The parties have complete control over the outcome, as opposed to relinquishing that authority to a third party.
The Ombudsman Program in its simplest definition is informal telephone mediation. In some cases, it can address and solve minor complaints from the public. It can also solve inter‐REALTOR® conflicts before they become serious problems. Like a mediator, an ombudsman helps parties find solutions. Ombudsman Procedures adopted by the South Shore REALTORS® are intended to provide enhanced communications and initial problem-solving capacity to the professional standards process. An Ombudsman can respond to general questions regarding real estate practices, transaction details, ethical practices and enforcement issues.