REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients.
At its core, the Code of Ethics and Standards of Practice of the National Association of Realtors® seeks to strike a balance between promoting a competitive real estate market while requiring Realtors® to cooperate when it serves the best interests
of their clients. Article 16 addresses the existing space between the fierce competition by brokers prior to the creation of an exclusive representation agreement, and the cooperation required of Realtors® after such an agreement is signed.
When Realtors® think of Article 16, they will likely contemplate a violation that occurs when a client, who is subject to an exclusive representation agreement with another Realtor®, is offered the same type of real estate services contemplated
in the agreement by a competing Realtor® (i.e., “going behind the sign”). This prohibited act can take many forms – Realtors® contacting a seller client (to offer those same services) when an MLS listing is in a temp-off
status, a cooperating Realtor® contacting a seller directly to request a showing or present an offer, or a competing Realtor® contacting a client to “criticize” the services provided by the client’s Realtor® (which might
also have Article 15 implications) and potentially inducing a breach of the existing agreement.
Article 16 requires Realtors® to avoid any action that could be construed as an interference of an exclusive representation agreement – but there are some “exceptions” (as detailed in Article 16’s Standards of Practice) so
as to avoid discouraging competition. First, the requirements of Article 16 do not apply to exclusive representation agreements that non-Realtors® have with their clients. Next, Article 16 does not preclude a Realtor® from sending general
communications to a specific area or neighborhood (assuming that the communications are sent to everyone and not just homes with “For Sale” signs in the front yard!) Finally, Article 16 does not prohibit Realtors® from contacting a
client subject to an exclusive representation agreement with another Realtor® to provide a different type of real estate service.
This detailing of permitted and prohibited acts is not exhaustive, but it should provide a good overview of some common misunderstandings related to Article 16. Exclusive representation agreements are vital to protecting the interests of both the client(s)
and their broker, and interference in those agreements is unethical and unprofessional. For more information, please review the Code of Ethics and Standards of Practice of the National Association of Realtors® and NAR’s Case Interpretations Relating to Article 16.
