Case #12-9: Unethical Advertising

REALTOR® A posted an ad on his website soliciting $15,000 investments in a “sure thing.” The ad explained that he was seeking only ten investors at $15,000 each; that each investor would receive $18,000 for his investment in 30 days; or, if he chose to invest for a longer period, could receive $24,000 in 90 days. The ad stated that REALTOR® A personally guaranteed this investment experience to the first ten investors who responded to the ad.

A member of REALTOR® A’s Association saw the ad and was concerned. He filed an ethics complaint, and in the subsequent hearing, REALTOR® A was asked to demonstrate that he had put liquid assets in escrow to back up his published guarantee. REALTOR® A was at first evasive, and then explained that there was no possibility of any one losing any money as a result of his ad because he had simply been using ingenuity to develop a list of prospects interested in small real estate investments.

REALTOR® A explained that he had told those who inquired that the opportunity was no longer available, but that he would take their names and addresses for future investment opportunities that might arise. He explained that in this case any guarantee he would make in a tangible transaction would, of course, be fully protected by liquid assets put in escrow.

How would you decide on REALTOR® A?

Ethics Violation of Article 12 in the NAR Code of Ethics? or No Violation?

See below for how this hearing panel ruled…if you think a violation, how much discipline would you impose? Fine of $________ and ____ hours of education.

If you were the respondent (aka defendant) REALTOR® in this complaint would you have considered taking an offered citation (small fine and education) in lieu of a full formal ethics hearing or waiving your right to a full formal hearing and accepting the fine and education imposed by the ethics committee who takes into account your admission of unprofessional behavior (aka take a plea deal)?

SCR is receiving numerous reports of unprofessional behavior. Across the country, unprofessional behavior is the number #1 complaint by REALTORS® about their colleagues in the market.

There are several ways of addressing and trying to correct unprofessional behavior. Lead by example. If you see unprofessional behavior, say something. Discuss with the other REALTOR®. Discuss with the REALTOR®’s Broker-in-Charge (BIC). Consider filing ethics complaints at the appropriate association and filing license law complaints at LLR.

The Hearing Panel concluded that REALTOR® A had not provided a “true picture” in his advertisement, and was in violation of Article 12.

Posted by: Byron King on 09/09/20 (This information is only accurate as of 09/09/20. You must contact SCR for updates and changes to this information after 09/09/20 as laws and regulations may change over time. SCR 803-772-5206 or email Byron)