Consider the Code: Ethics for Everyday
NAR’s long-standing Code of Ethics provides consistent standards, guidelines, and language, which ensures REALTORS® conduct business with integrity. The Code is more important than ever when serving your clients and differentiating yourself as a professional. Consider the Code, Standards of Practice, and Case Interpretations to help guide your business decisions.
Question:
Is there a potential ethics issue around using “Choose Your Neighbor” marketing letters, or marketing materials sent to residents in a neighborhood or specific subdivision, to promote a listing?
What does the Code say?
- Article 10: REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.
Answer:
This marketing tactic should be carefully considered before implementing as it could be a violation of the REALTOR® Code of Ethics if “Choose your Neighbor” marketing letters are the only way the property is advertised. In the example of Case Interpretation #10-4, the REALTOR® did not enter the listing in the MLS, did not place a “For Sale” sign on the property and did not advertise the property online at the instruction of his client. The seller said that he wanted the sale handled quietly, with the new purchasers being people who would “fit into the neighborhood — people with the same socioeconomic background” as the other residents of the subdivision.
The REALTOR® was found in violation of Article 10 of the Code of Ethics and the hearing panel’s opinion was that the exclusive use of “Choose Your Neighbor” letters to market the property was designed to circumvent the requirements of Article 10. Additionally, the panel advised that no instruction from a seller could absolve a REALTOR® from the obligation to market properties without regard to race, color, religion, sex, handicap, familial status, country of national origin, sexual orientation, or gender identity.
However, the use of “Choose Your Neighbor” marketing letters may not be a violation when used as one element in a larger marketing campaign. According to Case Interpretation #10-5, a REALTOR® listed the property on the MLS, used various online advertising methods, and sent “Choose Your Neighbor” marketing letters to current neighborhood residents.
The hearing panel noted that the use of “Choose Your Neighbor” letters is not a violation of Article 10, per se, but cautioned that such letters could be used in a manner inconsistent with the intent of the Article. If used in conjunction with other marketing techniques and not as a means of limiting or restricting access to property to those of a particular protected class, “Choose Your Neighbor” letters were another method of announcing a property’s availability and attracting potential purchasers.
Other considerations:
Beyond ethics violations, restricting the access of housing from those in protected classes as defined by the Fair Housing Act could also lead to fines and other consequences. REALTORS® are encouraged to learn more about fair housing issues by completing the Fairhaven training simulation and earning the At Home with Diversity certification.
Additionally, IMLS subscribers are subject to the rules and regulations of the service, which specifies in Section 1 that:
Listings of real or personal property that includes an accurate recorded legal description or parcel number of the following types, which are listed subject to a real estate broker’s license, and which are located within the Territorial jurisdiction of the Intermountain Multiple Listing Service, Inc. taken by Participants on an exclusive-right-to-sell listing form or exclusive agency listing form shall be delivered to the Multiple Listing Service or input under the “Listing Input” program by the next business day after any marketing and/or advertising begins. Public marketing includes, but is not limited to, flyers displayed in windows, yard signs, digital marketing on public facing websites, brokerage website displays (including IDX and VOW), digital communications marketing (email blasts), multi-brokerage listing sharing networks, and applications available to the general public. Listing Date is defined as the day any advertising and/or marketing begins. Failure to submit a listing by the next business day after any advertising and/or marketing begins will result in a fine per transaction, in an amount as determined from time to time by the IMLS Board of Directors.
Following the IMLS rules and publishing the listing on the service is a great way to advertise the property to the widest audience of agents and the public, as part of the overall marketing campaign you do on behalf of your seller.
