Because REALTORS® can face ethics complaints and license law complaints and lawsuits for interfering with another brokerage member’s clients (e.g. buyer clients, seller clients, landlord clients, tenant clients, buyer transaction brokerage consumers, seller transaction brokerage consumers, landlord transaction brokerage consumers, tenant transaction brokerage consumers), it may be in your own best risk management interests to make routine inquiry into a consumer’s recent real estate dealings and communications.
Questions could include asking about:
What real estate have you been viewing in person on electronically? When did this occur?
Which real estate professionals have you been communicating with in person or electronically? When did this occur?
Did you sign anything or receive anything or e-sign anything? If so, do you recall what it was? Do you have copies? Can I see the copies?
What are your real estate service needs?
Anytime that you get hints from the consumer that they may have been communicating with another brokerage, you may want to ask follow up questions to help determine your risks.
You may want to discuss with your BIC and you may want to call the SCR legal hotline 803-772-5206 whenever you get hints that this consumer may already be communicating with another brokerage or working with another brokerage.
There are risks even if the consumer initiates contact with you.
Always be on high-risk management alert when you learn that a consumer may already be communicating with another brokerage.
Also whenever you have substantive contact with anyone about real estate (e.g. communication online, communication at listing presentation, communication at restaurant, communication at grocery store, communication at a party, communication at church, communication at beach, communication on the street, communication at your office), you must explain your brokerage’s agency and non-agency (aka transaction brokerage) services and provide a copy of the LLR SC Disclosure of Real Estate Brokerage Relationship form (SCR110).
So, you may want to carry SCR110 copies with you and have a smartphone photo of the SCR110 form for insta-text and have email copies of SCR110 for emailing and use zipForms Digital Ink for e-signing and zipForms mobile for finger e-signing on your smartphone/tablet.
https://screaltors.org/wp-content/uploads/Forms/110.pdf
License law:
(24) engages in a practice or takes action inconsistent with the agency relationship that other real estate licensees have established with their clients;
(4) The department shall maintain a public docket or other permanent record in which must be recorded all orders, consent orders, or stipulated settlements.
(D) A licensee may voluntarily surrender his license in accordance with Section 40-1-150.
(E)(1) The commission may impose disciplinary action in accordance with Section 40-1-120.
(2) Upon determination by the commission that one or more of the grounds for discipline exists, the commission may impose a fine of not less than five hundred or more than five thousand dollars for each violation and as provided in Section 40-1-120. The commission may recover the costs of the investigation and the prosecution as provided in Section 40-1-170.
(3) Nothing in this section prevents a licensee from voluntarily entering into a consent order with the commission wherein violations are not contested and sanctions are accepted.
(F) The department annually shall post a report that provides the data for the number of complaints received, the number of investigations initiated, the average length of investigations, and the number of investigations that exceeded one hundred fifty days.
Section 40-57-730. After revocation of a license, a person may not reapply for three years from the date of revocation. A person seeking licensure after revocation shall:
Article 16
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. (Amended 1/04)
• Standard of Practice 16-1
Article 16 is not intended to prohibit aggressive or innovative business practices which are otherwise ethical and does not prohibit disagreements with other Realtors® involving commission, fees, compensation or other forms of payment or expenses. (Adopted 1/93, Amended 1/95)
• Standard of Practice 16-2
Article 16 does not preclude Realtors® from making general announcements to prospects describing their services and the terms of their availability even though some recipients may have entered into agency agreements or other exclusive relationships with another Realtor®. A general telephone canvass, general mailing or distribution addressed to all prospects in a given geographical area or in a given profession, business, club, or organization, or other classification or group is deemed “general” for purposes of this standard. (Amended 1/04)
Article 16 is intended to recognize as unethical two basic types of solicitations:
First, telephone or personal solicitations of property owners who have been identified by a real estate sign, multiple listing compilation, or other information service as having exclusively listed their property with another Realtor® and
Second, mail or other forms of written solicitations of prospects whose properties are exclusively listed with another Realtor® when such solicitations are not part of a general mailing but are directed specifically to property owners identified through compilations of current listings, “for sale” or “for rent” signs, or other sources of information required by Article 3 and Multiple Listing Service rules to be made available to other Realtors® under offers of subagency or cooperation. (Amended 1/04)
• Standard of Practice 16-3
Article 16 does not preclude Realtors® from contacting the client of another broker for the purpose of offering to provide, or entering into a contract to provide, a different type of real estate service unrelated to the type of service currently being provided (e.g., property management as opposed to brokerage) or from offering the same type of service for property not subject to other brokers’ exclusive agreements. However, information received through a Multiple Listing Service or any other offer of cooperation may not be used to target clients of other Realtors® to whom such offers to provide services may be made. (Amended 1/04)
• Standard of Practice 16-4
Realtors® shall not solicit a listing which is currently listed exclusively with another broker. However, if the listing broker, when asked by the Realtor®, refuses to disclose the expiration date and nature of such listing, i.e., an exclusive right to sell, an exclusive agency, open listing, or other form of contractual agreement between the listing broker and the client, the Realtor® may contact the owner to secure such information and may discuss the terms upon which the Realtor® might take a future listing or, alternatively, may take a listing to become effective upon expiration of any existing exclusive listing. (Amended 1/94)
• Standard of Practice 16-5
Realtors® shall not solicit buyer/tenant agreements from buyers/tenants who are subject to exclusive buyer/tenant agreements. However, if asked by a Realtor®, the broker refuses to disclose the expiration date of the exclusive buyer/tenant agreement, the Realtor® may contact the buyer/tenant to secure such information and may discuss the terms upon which the Realtor® might enter into a future buyer/tenant agreement or, alternatively, may enter into a buyer/tenant agreement to become effective upon the expiration of any existing exclusive buyer/tenant agreement. (Adopted 1/94, Amended 1/98)
• Standard of Practice 16-6
When Realtors® are contacted by the client of another Realtor® regarding the creation of an exclusive relationship to provide the same type of service, and Realtors® have not directly or indirectly initiated such discussions, they may discuss the terms upon which they might enter into a future agreement or, alternatively, may enter into an agreement which becomes effective upon expiration of any existing exclusive agreement. (Amended 1/98)
• Standard of Practice 16-7
The fact that a prospect has retained a Realtor® as an exclusive representative or exclusive broker in one or more past transactions does not preclude other Realtors® from seeking such prospect’s future business. (Amended 1/04)
• Standard of Practice 16-8
The fact that an exclusive agreement has been entered into with a Realtor® shall not preclude or inhibit any other Realtor® from entering into a similar agreement after the expiration of the prior agreement. (Amended 1/98)
• Standard of Practice 16-9
Realtors®, prior to entering into a representation agreement, have an affirmative obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service. (Amended 1/04)
• Standard of Practice 16-10
Realtors®, acting as buyer or tenant representatives or brokers, shall disclose that relationship to the seller/ landlord’s representative or broker at first contact and shall provide written confirmation of that disclosure to the seller/landlord’s representative or broker not later than execution of a purchase agreement or lease. (Amended 1/04)
• Standard of Practice 16-11
On unlisted property, Realtors® acting as buyer/tenant representatives or brokers shall disclose that relationship to the seller/landlord at first contact for that buyer/tenant and shall provide written confirmation of such disclosure to the seller/landlord not later than execution of any purchase or lease agreement. (Amended 1/04)
Realtors® shall make any request for anticipated compensation from the seller/landlord at first contact. (Amended 1/98)
• Standard of Practice 16-12
Realtors®, acting as representatives or brokers of sellers/ landlords or as subagents of listing brokers, shall disclose that relationship to buyers/tenants as soon as practicable and shall provide written confirmation of such disclosure to buyers/tenants not later than execution of any purchase or lease agreement. (Amended 1/04)
• Standard of Practice 16-13
All dealings concerning property exclusively listed, or with buyer/tenants who are subject to an exclusive agreement shall be carried on with the client’s representative or broker, and not with the client, except with the consent of the client’s representative or broker or except where such dealings are initiated by the client.
Before providing substantive services (such as writing a purchase offer or presenting a CMA) to prospects, Realtors® shall ask prospects whether they are a party to any exclusive representation agreement. Realtors® shall not knowingly provide substantive services concerning a prospective transaction to prospects who are parties to exclusive representation agreements, except with the consent of the prospects’ exclusive representatives or at the direction of prospects. (Adopted 1/93, Amended 1/04)
• Standard of Practice 16-14
Realtors® are free to enter into contractual relationships or to negotiate with sellers/landlords, buyers/tenants or others who are not subject to an exclusive agreement but shall not knowingly obligate them to pay more than one commission except with their informed consent. (Amended 1/98)
• Standard of Practice 16-15
In cooperative transactions Realtors® shall compensate cooperating Realtors® (principal brokers) and shall not compensate nor offer to compensate, directly or indirectly, any of the sales licensees employed by or affiliated with other Realtors® without the prior express knowledge and consent of the cooperating broker.
• Standard of Practice 16-16
Realtors®, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/tenant representatives or brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation. (Amended 1/04)
• Standard of Practice 16-17
Realtors®, acting as subagents or as buyer/tenant representatives or brokers, shall not attempt to extend a listing broker’s offer of cooperation and/or compensation to other brokers without the consent of the listing broker. (Amended 1/04)
• Standard of Practice 16-18
Realtors® shall not use information obtained from listing brokers through offers to cooperate made through multiple listing services or through other offers of cooperation to refer listing brokers’ clients to other brokers or to create buyer/tenant relationships with listing brokers’ clients, unless such use is authorized by listing brokers. (Amended 1/02)
• Standard of Practice 16-19
Signs giving notice of property for sale, rent, lease, or exchange shall not be placed on property without consent of the seller/landlord. (Amended 1/93)
• Standard of Practice 16-20
Realtors®, prior to or after their relationship with their current firm is terminated, shall not induce clients of their current firm to cancel exclusive contractual agreements between the client and that firm. This does not preclude Realtors® (principals) from establishing agreements with their associated licensees governing assignability of exclusive agreements. (Adopted 1/98, Amended 1/10)
An ethics proceeding has two essential purposes: education and vindication. It is educational in that it raises the consciousness of members to the meaning and significance of the Code. Many ethics violations occur inadvertently or through ignorance, and the hearing proceeding serves as an effective educational tool.
In filing a charge of an alleged violation of the Code of Ethics by a Realtor®, the charge shall read as an alleged violation of one or more Articles of the Code. A Standard of Practice may be cited only in support of the charge. The Preamble is aspirational. Articles 1 through 17 establish specific obligations for which Realtors® may be disciplined.
The Board has wide latitude in the sanctions which may be applied for violations of the Code of Ethics. It must, however, act responsibly in the application of these sanctions, attempting always to make the punishment commensurate with the offense. Recommendations of Ethics Hearing Panels may range from a mild Letter of Warning to termination of membership as follows in order of severity, provided that such actions are specifically authorized in the Professional Standards procedures of the Board’s bylaws:
(a) Letter of Warning with copy to be placed in member’s file;
(b) Letter of Reprimand with copy to be placed in member’s file;
(c) Requirement that member attend the ethics portion of the Board Indoctrination Course or other appropriate course or seminar specified by the Hearing Panel which the respondent could reasonably attend, taking into consideration cost, location, and duration;
(d) Appropriate and reasonable fine not to exceed $15,000 (Amended 5/13);
(e) Membership of individual suspended for a stated period of time not less than thirty (30) days nor more than one (1) year, with automatic reinstatement of membership in good standing at the end of the specified period of suspension. The thirty (30) day minimum and one (1) year maximum do not apply where suspension is imposed for a remediable violation of a membership duty (e.g., failure to pay dues or fees or failure to complete educational requirements. The Directors may order suspension unconditionally, or they may, at their discretion, give the disciplined member the option of paying to the Board, within such time as the Directors shall designate, an assessment in an amount fixed by the Directors, which may not exceed $15,000 and which can be utilized only once in any three (3) year period, in lieu of accepting suspension. But, if the conduct for which suspension is ordered consists of failure to submit a dispute to arbitration, the Directors may not permit the disciplined member to avoid suspension without submitting to the arbitration in addition to paying the assessment, unless in the meanwhile the dispute has been submitted to a court of law without any objection by any party that it should be arbitrated; (Amended 11/13)
(f) Expulsion of individual from membership with no reinstatement privilege for a specified period of one (1) to three (3) years, with reinstatement of membership to be by application only after the specified period of expulsion on the merits of the application at the time received (decision should be written clearly articulating all intended consequences, including denial of MLS participatory or access privileges); (Amended 4/96)
(g) Suspension or termination of MLS rights and privileges may also be utilized. Suspension of MLS services may be no less than thirty (30) days nor more than one (1) year; termination of MLS services shall be for a stated period of one (1) to three (3) years; (Amended 5/02)
(h) Realtors® who are not members of a Board from which they purchase the multiple listing service and their users and subscribers remain obligated under the Code of Ethics on the same terms and conditions as Realtors® and Realtor-Associate® members of that Board. Discipline that may be imposed may be the same as but shall not exceed the discipline that may be imposed on that Board’s members. Boards entering into regional or reciprocal MLS agreements are encouraged to include provisions requiring signatory Boards to respect, to the extent feasible, decisions rendered by other Boards involving suspension or expulsion from membership or from MLS. (Amended 4/96)
(i) Members may also be required to cease or refrain from continued conduct deemed to be in violation of the Code, or to take affirmative steps to ensure compliance with the Code, within a time period 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 (3) years from the date of required compliance. (Adopted 05/14)
In addition to imposing discipline, the Hearing Panel can also recommend to the Board of Directors that the disciplined member be put on probation. Probation is not a form of discipline. When a member is put on probation the discipline recommended by the Hearing Panel will be held in abeyance for a stipulated period of time not longer than one (1) year. Any subsequent finding of a violation of the Code of Ethics during the probationary period may, at the discretion of the Board of Directors, result in the imposition of the suspended discipline. Absent any subsequent findings of a violation during the probationary period, both the probationary status and the suspended discipline are considered fulfilled, and the member’s record will reflect the fulfillment. The fact that one or more forms of discipline will be held in abeyance during the probationary period does not bar the imposition of other forms of discipline which will not be held in abeyance. (Revised 5/14)
In addition to any discipline imposed, Boards and Associations may, at their discretion, impose administrative processing fees not to exceed $500 against respondents found in violation of the Code of Ethics or other membership duties. Any administrative processing fee will be in addition to, and not part of, any disciplinary sanction imposed. Boards and Associations shall determine in advance when, and under what circumstances, administrative processing fees will be imposed so that imposition is a matter of administrative routine. (Revised 5/13)
Board Officers and Hearing Panels should consult with the Board attorney and refer to the Case Interpretations as well as the Board bylaws and this Code of Ethics and Arbitration Manual for additional assistance in properly enforcing the Code of Ethics.
Posted by: Byron King on 4/25/18 (This information is only accurate as of 4/25/18. You must contact SCR for updates and changes to this information after 4/25/18 as laws and regulations may change over time. SCR 803-772-5206 or email info at screaltors.org)