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COVID-19 and the Code

Posted by GCAR on May 22, 2020
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As REALTORS® attempt to follow an ever-changing array of state orders to stay home and government recommendations, where does NAR’s Code Of Ethics come into play?

The COVID-19 pandemic has changed our lives both personally and professionally. The National Association of REALTORS® has provided many great resources to support REALTORS® in their businesses. One area with the potential for confusion is understanding how the layers of regulations and stay-at-home orders intersect—or don’t—with NAR’s Code of Ethics.

Among the many pieces of guidance issued by NAR’s legal team is this: “In deciding how to address new issues that may come up in your day-to-day business, we urge you to find answers that will ensure first-class services to your clients, while also demonstrating care for the health and well-being of clients, agents, and the greater public welfare in reducing the risk of exposure to and spread of COVID-19.”

What’s key about this approach is that it recognizes that we are business owners who must work within our own state and local guidelines as we make decisions about how to conduct our business safely. Of course, as REALTORS® we also must abide by the Code—but our decision about how to respond to stay-at-home orders is not automatically covered by the Code.

Stay-at-home/shelter-in-place orders are not uniform from place to place. Some states have labeled real estate an essential service and other have not—and each of these states (and in some cases municipalities) has its own interpretation of what functions are essential with the real estate transaction. REALTORS® are required by their state or municipality to follow the provisions of the order in their jurisdiction. But to be a violation of the Code, a violation of the order must involve conduct directly addressed by one of the Code’s Articles or Standards of Practice directly address. Let’s say a stay-at-home order requires that a REALTOR® not meet a customer for an in-person meeting but that the REALTOR® and the customer decide they want to meet anyway. The fact that the meeting takes place is a violation of our assumed stay-at-home order, but it’s not a violation of the Code. There’s no Article or Standard of Practice that prohibits an in-person meeting with a customer.

The Code of Ethics is a specific set of real estate principles and is not designed to address every aspect of our business conduct or our lives. Some of us may think another’s conduct is “unethical,” “offensive,” or “immoral.” Each of us has personal moral values that we adhere to but that our friends, neighbors, or fellow REALTORS® may not. Our personal ethical principles extend to actions outside the Articles and Standards of Practice in the Code, and when an action violates our personal moral code, that doesn’t mean it violates the Code of Ethics.

To determine if a violation of a stay-at-home order was a violation of the Code, a hearing panel would look at the actual conduct that occurred and determine if a specific Article or Standard of Practice applied.

Articles that might apply to conduct in the COVID-19 environment include:

Article 1: fiduciary duty and honesty
Article 2: disclosure of property conditions
Article 3: cooperation and access
Article 10: discrimination
Article 12: truthful communications
Article 16: respecting exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with their clients

To clear up the confusion, focus on the conduct and consider which source of guidance applies: the law or stay-at-home order, federal recommendations, or the Code?

In addressing these difficult business issues, use NAR’s coronavirus resources. Encourage other REALTORS® to use these resources and to follow stay-at-home orders. Continue to consult NAR’s Transaction Guidance During COVID-19 as the guidance is regularly updated. And use all these the guidelines to decide how to provide first-class service to your clients while you demonstrate care for health and safety of all to reduce the risk of exposure to and spread of COVID-19.

Reprinted from REALTOR® Magazine Online, April 2020, with permission of the National Association of REALTORS®. Copyright 2020. All rights reserved.