Yamhill County Association of Realtors®

Professional Standards, by Jean Elmore, Chair of the Professional Standards Committee

Rather than a case study this month, it’s time to revisit the procedures for filing a grievance. The first and foremost requirement of a grievance filing is CONFIDENTIALITY! The Grievance and Professional Standards committees are stand-alone entities. Even though the Association president appoints the chairpersons of the committees, the Board of Directors members have no advance knowledge of details of the grievance, or the parties involved as they may be called upon to ratify a decision of the Professional Standards Panel.

If you feel that a member of the Association has violated an article of the Code of Ethics (Grievance filing), or if you have a commission disbursement issue with a REALTOR® member agent (Request for Arbitration), here is how to get started:

Call or email Judi Hammer or Jean Elmore and say ONLY that you wish to request a Grievance or Arbitration Packet. Please do not vent or provide details. We will forward your message to our acting OAR appointed Professional Standards Administrator, Susan Schneider of PMAR. You may also contact Susan directly and she will send you the forms to fill out to start the process. She is the ONLY person who will  have names and details at this point. She will then let Judi know that the Grievance Committee may have to meet to determine if the grievance or arbitration request has sufficient merit to forward to the Professional Standards Committee. The paperwork you submit to the administrator, as well as  all communications, will have very specific instructions on how to proceed from this point.

CONFIDENTIALITY is the keystone of this entire process to assure that every case is considered fairly.

Judi Hammer
Phone: 503-435-8477
Email: judi@judihammer.com

Jean Elmore
Phone: 503-472-8411
Email: jean@jeanelmore.com

Professional Standards, by Jean Elmore, Chair of the Professional Standards Committee

REALTOR® CODE OF ETHICS, ARTICLE 10: 

Article 10 of the Code of Ethics outlines the responsibility of brokers to offer professional services to all persons regardless of race, religion, color, sex, handicap, familial status, sexual orientation or national origin. So, can you announce your new listing to the neighborhood with a “Choose your Neighbor” mailing? Maybe, if done properly. Here are two case studies on this topic with very different outcomes.

Case 10-4: Use of “Choose Your Neighbor” Marketing Letters

Case 10-5: Use of “Choose Your Neighbor” Form Letters as Part of a Marketing Campaign

Professional Standards, by Jean Elmore, Chair of the Professional Standards Committee

REALTOR® CODE OF ETHICS, ARTICLE 8: 

REALTORS® shall keep in a special account in an appropriate financial institution, separated from their own funds, monies coming into their possession in trust for other persons, such as escrows, trust funds, clients’ monies, and other like items.

The subject of Article 8 of the Code of Ethics regarding keeping business funds separate from personal funds seems like a no-brainer, but violations of this Article are often seen in the reprimands and sanctions listings in OAR communications. Unexpected things can happen when money is involved, and here’s a case study dealing with just that: http://pgcar.com/ethics/2008/ethics-case-0505.htm

REALTOR^® A, a listing broker, obtained a signed offer to purchase, together with Buyer C’s check for $5,000 as an earnest money deposit. Buyer C’s offer was subject to the sale of his current residence. REALTOR^® A presented the offer to Seller B who accepted it. REALTOR^® A then inadvertently deposited the earnest money check in his personal checking account. Since Buyer C’s offer was contingent on the sale of his current home, Seller B’s house remained on the market. A week later, REALTOR^® A received another offer to purchase Seller B’s house from another broker and presented it to the seller as a back-up offer. Buyer C was informed about this new offer and reluctantly concluded that he would be unable to waive the sale contingency or proceed with the purchase of Seller B’s house. He then asked REALTOR^® A for his $5,000 check back. REALTOR^® A explained that he had mistakenly deposited Buyer C’s check in his personal bank account which had been attached since he received Buyer C’s offer, and he was temporarily unable to refund the deposit to Buyer C.

Buyer C filed a complaint with the Board of REALTORS^®, which was received by the Grievance Committee. The Grievance Committee concluded that the complaint warranted a hearing and referred it to the Professional Standards Committee. At hearing, REALTOR^® A explained that his bank account had been unexpectedly attached following the loss of a civil suit which he was appealing; that his deposit of Buyer C’s check in his personal account was a simple error in handling deposit slips; that he was arranging for the prompt release of his account; and that everything would be straightened out in three or four days, which should not be of great inconvenience to Buyer C.

Based on your understanding of the Code of Ethics Article 8, what do you think the Professional Standards Panel ruled?

It was the conclusion of the Hearing Panel that REALTOR^® A was in violation of Article 8 of the Code of Ethics for having failed to put Buyer C’s earnest money deposit in a special account separate from his personal funds.

Professional Standards, by Jean Elmore, Chair of the Professional Standards Committee

Article 7: Acceptance of Compensation from Buyer and Seller 

Here is a good Code of Ethics Article 7 case study to start out the year regarding accepting payment from both parties, especially for brokers who are still writing contracts with disclosed  dual agency status.

Buyer A engaged REALTOR^® B to locate a small commercial property. Buyer A explained his exact specifications indicating that he did not wish to compromise. They agreed that if REALTOR^® B could locate such a property within Buyer A’s price range, he – the buyer – would pay a finder’s fee to REALTOR^® B.

Two weeks later, REALTOR^® B called Buyer A to advise that Seller C had just listed a property with him that met all of Buyer A’s specifications except that the listed price was a bit higher than Buyer A wanted to pay. Buyer A inspected the property and liked it, but said he would adhere to his original price range. REALTOR^®B called Buyer A three days later to say that Seller C had agreed to sell at Buyer A’s price. The sale was made and REALTOR^® B collected a commission from Seller C and a finder’s fee from Buyer A which was not disclosed to Seller C, REALTOR^® B’s client.

Several weeks later, Seller C learned about the finder’s fee that REALTOR^® B had collected from Buyer A and filed a complaint with the Board of REALTOR^® charging REALTOR^® B with duplicity and unprofessional conduct. The complaint specified that when REALTOR^® B had presented Buyer A’s offer at less than the listed price, he, the seller, was reluctant to accept it, but REALTOR^® B had convinced him that the offer was a fair one and not likely to be improved upon in the current market; and that REALTOR^® B had dwelt at length on certain disadvantageous features of the property in an attempt to promote acceptance of the offer. The complaint charged that REALTOR^® B had actually been the agent of the buyer while holding himself out as the agent of the seller. Further, Seller C asserted that REALTOR^® B had never mentioned that he was representing the buyer or intended to be compensated by the buyer.

At the hearing, REALTOR^® B’s defense was that he had served both buyer and seller faithfully; that he had not accepted Seller C’s listing until after he had agreed to assist Buyer A in locating a property; and that in his judgment the listed price was excessive and the price actually paid was a fair price.

Based on your understanding of the Code of Ethics Article 7, what do you think the Professional Standards Panel ruled?

A Hearing Panel of the Board’s Professional Standards Committee, which heard the complaint, concluded that REALTOR^® B had acted in violation of Article 7 of the Code of Ethics. His efforts to represent the buyer and the seller at the same time, and the fact that he intended to be compensated by both parties, should have been fully disclosed to all parties in advance.

Professional Standards, by Jean Elmore, Chair of the Professional Standards Committee

Article 6: “Avoid Side Deals without Client’s Informed Consent”

Last month we looked at a case regarding a potential violation of Article 4, and Article 5 also deals with disclosure of licensee interest so we are going to jump to Article 6, which deals with disclosure of side deals and affiliations without the client’s knowledge. Many REALTORS® allow ads of real estate related products on their websites to help cover the cost of maintaining the website. Others provide lists of recommended providers for their clients’ convenience which may or may not be of financial benefit to the REALTOR®. What are the disclosure requirements in these situations? Here’s a case study about advertising real estate related products and services - with a result that may surprise you!

Case Study: Advertising Real Estate-Related Products and Services

“REALTOR^® X, a principal broker in the firm XY&Z, prided himself on his state of the art website that he used both to publicize his firm and to serve the firm’s clients and customers electronically. REALTOR^® X maintained positive business relationships with providers of real estate-related products and services including financial institutions, title insurance companies, home inspectors, mortgage brokers, insurance agencies, appraisers, exterminators, decorators, landscapers, moving companies, and others. Given the volume of business REALTOR^® X’s firm handled, several of these companies advertised on the XY&Z home page and some of them, including the Third National Bank, included links to their own websites.” Read more…