Transcript Professional Standards Training

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Marcia Tabak, Florida Realtors, Deputy Legal Counsel
 Overview
 Interpretation
and Application of the Code of
Ethics
 Function of the Grievance Committee
 2015 NAR Changes
 The Hearing Process
 Due Process
 Authoring an Ethics Decision
 Procuring Cause
Let’s Break the Ice
Standards of Practice
Articles
Broad statements of ethical principles
Divided into Three Sections
Duties
to
Clients &
Customers
Articles
1-9
Duties
to
the Public
Articles
10-14
Duties
to
REALTORS
Articles
15-17
Support, interpret, and amplify the
Articles under which they are stated
Case Interpretations
Specific fact situations to which the
Articles and/or Standards of
Practice are applied
Golden Rule
Concept
 The
Code includes objective enforceable
standards, but does not address the
voluntary, professional courtesies and
etiquette guidelines.
 Good
 May
for business practices!
be supplemented by local customs and
practices
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Sally
“I would never work with a
buyer who has been
working with another
Realtor; it’s not something
I would do.”
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Fred
“Hey, it’s business, no one
owns the buyer. Besides,
he doesn’t want to work
with you anymore. I don’t
know what you did, but
he’s my buyer now.”
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How Well Do YOU Know the Code of Ethics?
Jane, a buyer’s agent, who is not a Realtor and neither is her
broker, called Listing Agent Jim to arrange for a showing.
Jim said, the property is not available for showing at this time,
call back in a week.
Jane makes a second attempt at scheduling an appointment
and was told the property is still not ready.
Frustrated, the buyer calls Jim and is shown the property that
very same day.
We, the members of the Hearing Panel, find the Respondent,
Realtor Jim, in Violation of Article 3 (citing Standard of Practice
3-10) for not making the property available on 15 Maple Ave to
the complainant when in fact the property was actually
available for showing on the very same day the complainant
requested a showing. Article 3 states that Realtor’s shall
cooperate with other brokers and based on the definition of
brokers in the NAR Code of Ethics and Arbitration Manual, the
term “broker” refers to any real estate licensee acting as an
agent or in a legally non-agency capacity.
1.
As part of her morning routine, Realtor Sally spends an
hour or more checking expired listings or listings that are
temporarily off the market or withdrawn.
2.
The minute she sees a status change, she calls the seller
to solicit the listing and promote her services.
3.
Realtor Bob is ticked when Sally contacts his seller after he
enters one of his listings as a “Temporarily Off the Market”
in the MLS.
We, the members of the Hearing Panel, find the Respondent,
Realtor Sally in Violation of Article 16 as cited in Standard of
Practice 16-9 whereby Realtor Sally did not make reasonable
efforts to determine whether or not the prospect was subject
to a current, valid exclusive agreement to provide the same
type of service.
1.
Realtor Rob works with the buyer on a transaction and
finds listing agent/broker unresponsive when he tries
to contact them.
2.
The seller experiences the same thing and starts
calling Rob asking for help. Rob tells the seller he
needs to talk to his agent/broker.
3.
The property is about to go into foreclosure, the seller
is desperate, pleads with Rob to take over the
transaction before he loses his house. Rob agrees….
We, the members of the Hearing Panel, find the Respondent,
Realtor Rob, not in violation of Article 16. It was the
complainant’s seller not the respondent who initiated contact
with the respondent. The respondent performed substantive
services as directed by the seller which is in compliance with
Standard of Practice 16-13.
1.
Realtor Kathy cooperated in her very first sale.
2.
Before the property closed, she mailed out postcards
promoting the fact she sold 15 Maple Avenue and
she can “Sell yours, too.” The postcard did not include
a disclaimer that telling sellers to disregard if they are
currently listed.
3.
When the transaction fell through, Kathy immediately
stopped sending out the postcards.
We, the members of the Hearing Panel, find the Respondent,
Realtor Kathy, not in violation of Article 12 of the Code of
Ethics based on Standard of Practice 12-7 and Case
Interpretation 12-5. Based on the fact that a bona fide offer
that was signed by both the buyer and the seller that brought
about the sale of 15 Maple Avenue, the respondent could
advertise she sold the property. Once it was clear the sale
had fallen through, the respondent immediately ceased
advertising she sold the property thereby maintaining a true
picture in her advertising.
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Realtor Bob, a member of the Sunny Beach Association,
receives a call from Realtor Sally who is a member of the
Barefoot Association which located 3 hours away.
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Sally’s buyer wants to see one of Bob’s listings. Sally’s
Association does not participate in MLS Advantage nor
does her broker belong to the Sunny Beach MLS.
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Sally requests access. Realtor Bob says, “no lockbox
access, no entry. PERIOD.”
We, the members of the Hearing Panel, find the Respondent,
Realtor Bob, in violation of Article 3 (citing Standard of
Practice 3-10) for not making the property accessible to the
complainant and her customer even though the complainant
did not have lockbox access.
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Realtor Jane’s buyers are on top of the world after they see the
property at 120 Maple Avenue.
Realtor Jane submits verbal offer to the listing agent, Realtor
Millie, and is told the seller accepts the verbal offer.
In the meantime Realtor Lucy shows the same property to her
buyers. Millie’s seller gives her the authority to share with Lucy
the terms of Jane’s buyers verbal offer. As a result, Lucy’s
buyers’ increase their offer.
The seller is satisfied with the terms of Lucy’s offer and has no
desire for Millie to contact Jane to ask for a competitive offer. He
signs Lucy’s offer.
Realtor Jane submits her written offer within an hour after Lucy’s
is accepted. She is furious…Talk about Shock and AWE!
We, the members of the Hearing Panel, find the Respondent,
Realtor Millie, not violation of Article 1 of the Code of Ethics.
The respondent had seller’s authority to disclose the existence
of verbal offer including the terms of the offer which is
supported by Standard of Practice 1-15 and Standard of
Practice 1-13(5).

Realtor Judy’s listed her sister’s property. Judy enters the listing
into the MLS immediately. Judy has no ownership interest in the
property nor does she stand to inherit from the proceeds of the
sale
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Buyer Fred, who is working with Realtor Ethel, puts in an offer on
the property.
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At closing, Fred and Ethel discover Judy’s sister is also the seller
this fact was never disclosed prior to signing the contract.
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Both feel this is a violation of the Code of Ethics and file an ethics
complaint against Judy.
We, the members of the Hearing Panel, find the Respondent,
Realtor Judy, not violation of Article 4 of the Code of Ethics
because the respondent had no ownership interest in the
property nor did she stand to gain an inheritance from the
proceeds of the sale.
Let’s change the facts, what if it
had been a lease?

Realtor Marcia’s listing is next door to a property where
underground utilities for new construction are underway.

Realtor Joel’s buyer asked him to find out from Marcia what is
being built next door because it could be a deal breaker. Marcia
tells Joel, it’s the new boutique shopping center she has been
reading about. It is supposed to go up in this area.

Joel’s buyer’ purchases the property and goes ballistic when he
finds out the construction next door is for a sewage treatment
plan. He wants to sell but once word gets out, he’s stuck!
We, the members of the Hearing Panel, find the Respondent,
Realtor Marcia, in violation of Article 2 of the Code of Ethics.
The buyer relied on the respondent’s statement that a
proposed boutique shopping venue was being built on the
adjacent property. The buyer would not have purchased the
property if he had known the construction project was a
sewage treatment plant.
Article 1
Protect, Promote,
Honesty
Article 3
Cooperation
Access to the Property
Article 12
True Picture
Presentation of offers
Confidentiality of the
terms of the offer
Changes in compensation must be communicated before the offer is
submitted. Shall not provide access to listed property on terms other
than those established by the owner and listing broker. Make access
available to non-electronic lock box users
Advertising another agent’s listings
Advertising MLS Stats
Article 15
Comments about
other Agents
Dinging another real estate professionals reputation by knowingly
making false, reckless or misleading statements about other
professionals, their businesses or their business practices.
Article 16
Respect for Client
Relationships
All dealings must be through the client’s
agent
Using the offer to modify compensation
Inducing clients to change
listing firms when REALTOR
changes firms
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The Unsung Heroes of the Professional Standards Process
Ethics Complaint or
Arbitration Request
Is filed with the
Association
Grievance Committee
Grand Jury
Refer to/or refer back a Hearing Panel
Professional
Standards Committee
Ethics and Arbitration
Hearings
Board of Directors
Appellant Body
Decision is Final
Appeal Decision of Grievance Committee
Judicial System
Professional Standards
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Complainant
Respondent
Grievance Committee
Professional Standards
Board of Directors
Professional Standards
Administrator
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Plaintiff
Defendant
Grand Jury
Hearings
Appellate Body
Clerk of the Court
Grievance
Committee
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Pre-hearing meetings – Where such issues are considered at
a pre-hearing meeting of the hearing panel, the chair will
determine whether the parties may be present, and the extent
to which their participation will be permitted. - The current
policy affords both sides parties the right to be present during
the Pre-hearing meeting – in 2015, it will be at the Chair’s
discretion if they will be present.

Probation means that a form of discipline recommended by
the Hearing Panel is held in abeyance…The fact that one or
more forms of discipline is held in abeyance during the
probationary period does not bar the imposition of other forms
of discipline that will not be held in abeyance.
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Members may also be required to cease or refrain from
continued conduct deemed to be in violation of the Code, or
take affirmative steps to ensure compliance with the Code,
within a period of time to be determined by the hearing panel.
Where discipline is imposed pursuant to this subsection, the
decision should also include additional discipline (e.g.
suspension or termination of membership) that will be
imposed for failure to comply by the date specified, and to
continue to comply for a specified period not to exceed three
years from the date of require compliance.
REALTOR take outs a billboard that doesn’t include his
company name and the hearing panel finds him in violation
of the Article 12 of the Code, as interpreted by SOP 12-5.
The discipline could include a statement like:
“The respondent is to take affirmative steps to ensure
compliance with the Code, as interpreted by SOP 12-5, within
thirty (30) days from receipt of final action by the Board of
Directors. If affirmative steps are not taken to ensure
compliance with the Code, the respondent will be suspended
from board membership until such steps are taken.

What is the appropriate role and use of Alternate panel
members?
o Answer: Associations may, but are not required to include one
or more alternate members.
o If alternates are included, alternates must be
• Seated apart from the Hearing Panel
• Not Participate in any way unless called on to replace a
panel member
• Are bound by same duties applicable to panel members.
Parties’ requests for continuances shall
only be granted when all parties mutually
agree to a subsequent specified date, or
when the hearing panel chair determines
that denying the request for continuance
would deny the requestor a fair hearing.
The intended purpose of rehearing's is
generally misunderstood and are
generally granted inappropriate
circumstances and such requests occur
so rarely that the Professional Standards
Committee voted to eliminate this
procedures entirely.
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Verbiage “that except “extreme circumstances” or rescheduling
to when participation is not feasible has been deleted.
Parties and their witnesses may request to participate via
teleconference or videoconference at the discretion of the
Hearing Panel Chair.
Only “parties” eligible to attend the entire hearing would be
entitled to participate remotely. Witnesses can only be present
during their own testimony.
Hearing panels, staff, or counsel should employ steps to verify
the identity of remote participants to preclude unauthorized
individuals from being present to safeguard the confidentiality of
the proceedings.
 Ombudsman
Services to members, clients
and consumers on or before January 1,
2016.
Rationale: Establishes responsibility of associations
to offer, either directly or as part of cooperative
enforcement agreement Ombudsman services to
members, clients and consumers.
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Question:
Do parties to ethics and arbitration hearings have the right
to question parties who choose not to testify?
Answer: In 2014 Section 5 and 30 of COEAM was amended
to clarify that
o All witnesses, except those who are also parties, will be excused
after their testimony and cross-examination unless otherwise
provided for in the COEAM.
o All parties appearing at the hearing may be called as witnesses
without advance notice
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You Can’t Find Fair in the Code – But Being Fair is What Due Process is All About
•Clothe
the process with
dignity that commands
respect
•Ensures
fairness for all
•Mandates
that hearings
are held in a uniform
manner
 Definition
from the
CEAM:

The due process requirement, after
all, requires nothing more than a fair
and diligent search for the truth –
with an opportunity for all facts to
be gathered; all views to be heard;
all defenses to be raised and all
prejudice of bias to be expunged.
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The Hearing Process
Ethics Complaint or
Arbitration Request
Is filed with the
Association
Grievance Committee
Grand Jury
Refer to/or refer back a Hearing Panel
Professional
Standards Committee
Conducts Hearings
Board of Directors
Appellant Body
Decision is Final
Appeal Decision of Grievance Committee
During the Hearing
Before the Hearing
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Postponements
Interpreters
Remote Testimony
Audio Testimony
Subpoena Power –
Arbitration only – call Florida
Realtors Legal Hotline for
more information
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Evidence/Testimony
Surprise Witnesses
Panel Conduct
Attorneys
Safety Issues
Parties, Witnesses and
Attorneys who are AWOL
Adding articles
Here is where your
Chairman’s Toolkit
comes in handy.
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The respondent submits evidence she did not include in her response.
This is the first time the complainant and the panel has seen it?
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The complainant shows up with a surprise witness (the buyer). The
respondent’s attorney objects because the complainant did not give
proper notice. The complainant insists the buyer’s testimony is critical
to his case.
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The attorney for the respondent says her schedule prevents her from
attending the hearing and has requested to be allowed to video
conference in?
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The attorney for the complainant is demanding the respondent produce
a copy the listing agreement. The respondent refuses to comply.
Oh my momma said
there’ll be days like
this …
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The respondent in an ethics case skips the hearing but sends his
attorney to present the case without him.
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The complainant who is a sales associate does not want his broker to sit
in the hearing. The broker insists he has a right to be there.
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During the hearing it appears the respondent may have violated articles
that were not named in the complaint. Do you let it go?
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You have a panelist who keeps nodding and bobbing her head in
agreement with one of the parties. It is also obvious by the tone of her
questioning she doesn’t like the complainant. Despite your efforts to
rein her in (and two recesses to caution her), she continues to be exhibit
behavior befitting a poster child for a procedural review.
Chair reads opening
statement and basis
for hearing
Cross Examination by
the Respondent and
Questions from the
Hearing Panel
Closing Statement by
Complainant
Swearing/Affirmation
of Witnesses
Respondent’s Opening
Statement &
Presentation of
Evidence and
Witnesses
Closing Statement by
Respondent
Complainant’s
Opening Statement &
Presentation of
Evidence and
Witnesses
Cross Examination by
the Complainant and
Questions from the
Hearing Panel
Closing Statement by
Chair – Did parties
receive a fair hearing?
Hearing is Adjourned
The Ethics
Decision
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•
Burden of proof: Is on the complainant
not the hearing panel.
•
Standard of Proof: Based on clear, strong and
convincing.
– That measure or degree of proof which will
produce a firm belief or conviction as to the
allegations sought to be established – in other
words, did the complainant prove that a violation
did occur.
Questions
Are the actions charged supported
by the evidence?
If the alleged conduct is true, does
it violate the Code of Ethics?
Did the complainant prove a
violation(s) occurred?
Yes
Which
Article?
No
Who?
What?
When?
Why?
How?
 Review
Executive
Session Checklist
 No monetary damages
allowed in Ethics
 Everyone will have an
opportunity to discuss
the evidence and
testimony
 Each
case is
considered separately
 No subjective opinions
based on personal
experiences
 Decision based on
facts not assumptions
Chair speaks last
Arbitration
Award
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Procuring Cause the Detective
The Standard of Proof in Board/Association arbitration is a
preponderance of the evidence – burden of proof rests primarily
with the party that asked for the arbitration
Evidence which is of greater weight or more convincing
than the evidence which is offered in opposition to it;
that is, evidence which as a whole shows that the facts
ought to be proved are more probable than not.
A Board or its
MLS cannot
make a rule
regarding
entitlement to
the commission
in a real estate
transaction
Interpretation
31, NAR Bylaws
Look at all of the relevant facts and
circumstances
No rules of thumb
Prior decisions by other panels, “threshold”,
“contract in hand” and agency relationships by
themselves do NOT determine entitlement
The agency relationship with the client or lack of
one does not determine procuring cause
Reasoning relied on by the courts
between sellers and listing brokers…
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The proximate cause; the cause
originating a series of events
which, without a break in their
continuity, result in the
accomplishment of the prime
object. The inducing cause; the
direct or proximate cause
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Substantially synonymous with
“efficient cause”.
From Black’s Law
Dictionary, Fifth Edition
NAR’s CEAM Definition:
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Procuring cause in broker to
broker disputes can be readily
understood as the uninterrupted
series of events which results in
the successful transaction. Or in
other words, what “caused” the
successful transaction to come
about.
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Create a timeline of events
o Check for breaks in time between the agent and the buyer
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Separate the Complainant’s series of events from the
respondents – Compare the two bucket lists. It’s all about
the
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Based on the evidence and testimony presented, what was
relationship between the buyer the agent?
o Abandonment of the buyer
o Perceived abandonment of the agent
o Estrangement – did the buyer fire the agent or was it the other way
around?
Evidence
The general rule is that anything the Hearing
Panel believes may assist it in reaching a fair,
equitable and knowledgeable decision is
admissible.
Possible Ethics Violations
Can be considered as part of the evidence
Can’t be used to withhold in otherwise
substantiated award
Should be considered as only one of many
potentially relevant factors
Do not make referrals of ethical concerns
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Non-judicial proceeding
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Legally binding
•
In Florida, witnesses
can be subpoenaed
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Parties can settle at
anytime
•
Arbitration cannot be
held in the absence of
the complainant
•
May proceed without
respondent if state law
permits
•
The panel may decline
to arbitrate:
– Because of the amount
in dispute
– Too legally complex
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Simply majority vote – Decision is valid and
binding
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No rationale – only states amount of award
o Not based on personal conduct but on series
of events related to a transaction
o Not subject to review by the BOD or appeal by
either party
o No punitive damages
o No Attorneys fees unless provided in an
agreement
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Winner and Loser – splitting the award is
not recommended; but permitted in rare
circumstances
Call us:
Margy Grant:
407.438.1400, ext. 2443
Anne Cockayne:
407.438.1400, ext. 2106
Marcia Tabak:
407.438.1400, ext. 2422
Joel Maxson:
407.438.1400, ext. 2433