by Kristie Walker
As a member of the grievance committee, I do not see articles 6 and 7 often but I know in my professional business I have encountered these.
If there is an affiliation with another business or you have personal interest in a business you are recommending to a client and expect that you or your brokerage will profit from the referral then definitely disclose. It is in your best interest to have this in writing.
An example may be a security company that offers you a bonus for referring your clients that just bought their home. A client may also offer to pay you directly for your services but all commissions must go through your brokerage.
Whenever you may receive any monies outside of the commission which is disclosed in your buyer broker agreement or listing agreement, full transparency is the best policy.
Read below for Articles 6 and 7 of the REALTOR® Code of Ethics
Article 6 (Case Interpretations for Article 6)
REALTORS® shall not accept any commission, rebate, or profit on expenditures made for their client, without the client’s knowledge and consent.
When recommending real estate products or services (e.g., homeowner’s insurance, warranty programs, mortgage financing, title insurance, etc.), REALTORS® shall disclose to the client or customer to whom the recommendation is made any financial benefits or fees, other than real estate referral fees, the REALTOR® or REALTOR®’s firm may receive as a direct result of such recommendation. (Amended 1/99) [listen]
- Standard of Practice 6-1
REALTORS® shall not recommend or suggest to a client or a customer the use of services of another organization or business entity in which they have a direct interest without disclosing such interest at the time of the recommendation or suggestion. (Amended 5/88)
Article 7 (Case Interpretations for Article 7)
In a transaction, REALTORS® shall not accept compensation from more than one party, even if permitted by law, without disclosure to all parties and the informed consent of the REALTOR®’s client or clients. (Amended 1/93) [listen]