At their meeting Saturday, the NATIONAL ASSOCIATION OF REALTORS® Board of Directors affirmed REALTORS® obligation under the Code of Ethics to refrain from making false or misleading statements about competitors and their companies - including passing a new Standard of Practice that compels REALTOR® to remove or clarify misleading comments posted on their blogs.
The directors meeting capped off the REALTORS® Midyear Legislative Meetings & Trade Expo in Washington.
4 Professional Standards Changes
1.) Members have obligation to correct misleading statements. Standard of Practice 15-2 was amended and a new Standard of Practice was approved to strengthen members' obligations to refrain from making false or misleading statements about competitors, including in the use of social media tools.
The new amendment includes the duty "to publish a clarification about or to remove statements made by others on electronic media the REALTOR® controls once the REALTOR® knows the statement is false or misleading."
Translation? Say you publish a blog and someone else posts a false or misleading comment about a fellow REALTOR® on the blog. When you become aware of it, under this new standard, it's your duty to remove the post or publish a clarification.
The directors also approved a change to the NAR Bylaws, imposing the same duties on associations and MLSs as those imposed on members to not make false or misleading statements against competitors, competitors' business practices, or competitors' companies.
2.) Compensation acceptance. Standard of Practice 3-2 was amended to establish a clear definitional marker of the point in time at which a listing broker's offer of cooperative compensation is accepted. Any change in the compensation offered must be communicated to the cooperating REALTOR® before that REALTOR® submits an offer to purchase or lease the property.
3.) Exclusive contracts remain binding at termination. Standard of Practice 16-20 was amended to clarify that if a REALTOR®'s relationship with his or her brokerage is terminated, he or she can't take any action to induce clients to cancel exclusive contractual agreements with the brokerage, regardless of who terminates the relationship.
4.) Land brokerage is a specialty. Article 11 of the Code lists specialties that members should refrain practicing without training. The directors voted to amend the list, adding land brokerage as a practice area that requires specialized knowledge. (This change still must be approved by the NAR Delegate Body in November.)
3 MLS Policy Changes
1. Communicating short sale compensation changes. In a change to MLS policy, the board gave MLSs the discretion over how compensation changes are communicated in a short sale. Specifically, MLSs will be able to decide whether to permit participants to communicate to other participants how any reduction in the gross commission established in the listing contract by the lender, as a condition of approving a short sale, will be apportioned between the listing and cooperating brokers.
2. Short sales defined. The board also added the following definition of a short sale to the Handbook on Multiple Listing Policy: "a transaction where title transfers, where the sale price is insufficient to pay the total of all liens and costs of sale and where the seller does not bring sufficient liquid assets to the closing to cure all deficiencies."
3. RETS deadline extended. Finally, the board extended the compliance deadline for MLS vendors to adopt the Real Estate Transaction Standard (RETS) to Dec. 31, 2009.
Other Legislative Policy Changes
The board also voted to:
Support federal regulation of appraisal management companies (AMCs) to ensure they operate within the same standards as independent appraisers. The role of AMCs stands to grow under Fannie Mae and Freddie Mac guidelines that went into effect May 1. The guidelines, the new Home Valuation Code of Conduct, were established to reduce appraisal fraud.
Oppose federal legislation (H.R. 1020/S. 931) that would eliminate the enforceability of arbitration and other pre-litigation dispute resolution methods in connection with real estate matters.
Support legislation reinstating assumable loans by eliminating the "due on sale" clause for new and existing FHA and VA loans.