EFFECTIVE JAN. 1, 2019, Article 1, Standard of Practice 7 of the National Association of Realtors® Code of Ethics has been amended to include specific direction during a situation in which a cooperating broker submits an offer to a listing broker, and that cooperating broker requests confirmation that the offer has been submitted to the seller or landlord. The update requires the listing broker to provide a written affirmation OR a written notification that the seller or landlord has waived the obligation to have the offer presented.

While many in the industry will likely find this change to be positive by encouraging communication between the parties, it does present some additional questions. Ultimately, all of these uncertainties will be addressed by Realtors® on the Grievance and Professional Standards Committees. In the meantime, here is some initial guidance.

Q. THE UPDATE STATES THAT THE REQUEST, AFFIRMATION AND NOTIFICATION MUST BE “WRITTEN.” DOES THIS MEAN I CAN SEND A TEXT OR AN EMAIL TO SATISFY THIS REQUIREMENT?

A. The Code of Ethics does not specify the form that the written affirmation must take. However, Virginia law treats electronic communications the same as hardcopy written communications. Therefore, it is likely that an email would satisfy the requirement, and possible that a text message would also be sufficient.

Q. IS THERE A SPECIFIC TIMEFRAME IN WHICH THE LISTING BROKER MUST PROVIDE A RESPONSE?

A. There is not a specified timeframe during which the listing broker must provide a response. Therefore, a reasonableness standard would apply. A “reasonable time” for a response does not have a concrete definition and will be judged on a case-by-case basis.

Q. WILL THE NVAR FORMS BE UPDATED TO REFLECT THIS CHANGE?

A. The NVAR Standard Forms are currently compliant as this is primarily a communications issue and does not require a signed contract or addendum. However, the Standard Forms Committee may decide to recommend the creation of a form or modification of an existing form to facilitate this communication and enable the listing broker to provide a formal written affirmation.

For the 2019 updates to Article 1, Standard of Practice 7, in its entirety, and updates for the 2019 Code of Ethics and Arbitration Manual, please review NVAR.com/coeupdates.