Question: In what situations can NVAR’s new Citation System be used in lieu of an ethics violation hearing?

Answer: As many of you know, NVAR has recently implemented a new Citation System, which allows the Grievance Committee to issue a citation, similar to a speeding ticket, for a very limited number of violations to the Code of Ethics and the Lockbox Rules & Regulations. For information on the citation policy, see Legal Lines on page 20 of the March/April 2011 Update magazine. Below are examples of what might qualify for the Citation System:

Code of Ethics Violations
Article 1:
If you are acting as a dual agent in a transaction, and do not explain what this means to both parties and obtain their consent in writing before proceeding, you could be issued a citation for $500. This agreement by the parties is reflected on either the disclosure of brokerage relationship form or on the listing or buyer broker agreements.

Article 3:
In some listing agreements, sellers agree to pay a reduced commission if the listing agent or someone else in the brokerage is representing the buyer. If you have a listing agreement with a seller that contains a variable rate commission, and do not tell other potential cooperating brokers about it, the Grievance Committee could issue a $500 citation.

Article 4:
If you have some interest in a property, either financially or otherwise, that is being bought or sold, you must disclose that you are a Realtor® and what your interest in that property is. For example, when you decide to purchase a house and act as your own agent, you must tell the seller that you are a Realtor®. If you fail to do so, the Grievance Committee could issue you a $300 citation. Also, keep in mind that this applies to Realtors® acting on behalf of members of their immediate family, and certain other groups.

Article 5:
If you agree to provide an opinion on the value of a property in which you have an interest, either prospective or current, you must disclose this interest to the parties. For example, if you are considering buying a house, but have not acted on it yet and are asked to provide an opinion on the value of that house, you must disclose that you are considering purchasing the property. Failure to disclose this potential interest could cost $300 under the Citation System.

Article 6:
If you are the property manager for a particular property, and you receive a rebate from a contractor you hire to do some work, you could be liable for a $400 fine under the Citation System if you don’t disclose the rebate to the property owner.

Article 9:
NVAR sees many examples of agents who, despite their best intentions, do not fill out necessary forms completely. Frequently missed fields include: sales price on the listing agreement, contact information on forms, and obtaining the broker’s signature on listing agreements. Any of these could result in a $200 or $400 fine under the Citation System.

Similarly, when a listing agreement has expired, sellers often verbally extend the term of the listing agreement, without completing required paperwork. But failure to complete all necessary forms in writing could subject you to a $200 fine under the Citation System.

Article 12:
As Realtors®, Article 12 of the Code of Ethics requires you to disclose certain information in advertisements. For example, if you put an ad in a newspaper listing a house for sale, but do not include the fact that you are a Realtor®, or the name of your firm, you could be facing a $150 fine for each omission.

Failure to clearly represent the current condition of a house could subject you to a citation for $250 from the Grievance Committee under this article. One way to fail to present a true picture of a property would be to retouch a photograph, or even to use older photographs that may display the house in a better light than a current picture would. If, for example, the seller had the house re-painted five years ago and would like you to use pictures from that time period, those pictures would not clearly represent the current state of the house.

Another possible $250 citation could result from continuing to list properties you sold while at one brokerage after moving to another, without clarifying that some of the sales may have occurred while you were affiliated elsewhere.

Article 14:
If you receive a notice from NVAR that you have been named in an Ethics complaint or Arbitration request and that you must respond, failure to do so in the time set forth could cost you $500 under the Citation System.

Article 16:
Any offers to purchase a house that are contingent upon a reduced commission or the other party paying both commissions would be considered using the terms of an offer to modify the listing broker’s offer of compensation. Doing this could result in a $400 fine under the Citation System.

Lockbox Rules & Regulations
Policy 3:
Policy 3 of the Lockbox Rules & Regulations states that you may only enter a property using your SentriCard? when authorized. If the listing requires that you call before showing and you fail to do so, then you may be subject to a $500 fine under this policy.

Policy 5:
Policy 5 of the Lockbox Rules & Regulations prohibits you from sharing your SentriCard?, pin, or the property key with anyone else. If you loan or duplicate your SentriCard? or the property key to a property to another person, you may be fined $500.

Policy 10:
If for some reason your Virginia Real Estate License is not current, you cannot use a lockbox to enter a property. Please note that if you are in the 30-day-grace period that DPOR provides for licensees before imposing a re-activation fee, you CANNOT conduct real estate business (including using a lockbox to enter a property) because your license has lapsed. Doing so may result in a $500 fine.

Policy 17:
The Lockbox Rules & Regulations require that you keep all Call Before Showing codes confidential and only give them out on a case-by-case basis. If you put a CBS code in a listing, send it out in an unsolicited email or post it on a website, the Grievance Committee may fine you $450