Unit 6: Ethics of Practice as a License Holder

Professional Ethics

• Establish standards for integrity and competence in dealing with consumers of an industry’s services.

• Define a code of conduct for real estate professionals.

• Ethics refers to a system of moral principles, rules, and standards of conduct.

Canons of Professional Ethics

• The National Association of REALTORS contributes to the real estate profession their Code of Ethics, also known as Standards of Practice.

  • Not all license holders are REALTORS.

Violations of its codes bring severe consequences, including 

-loss of membership

-assessed penalty, such as a letter of reprimand;

-a fine of up to $5,000; and/or

-an ethics course given by the association

• A code of violation may also be a violation with the Texas Real Estate License Act, subject to complaint and/or violation TREC.

• License holders are obligated to conduct their real estate practice by applying the Standard of Practice, regardless of membership with NAR.

• TREC adopted the Canons of Professional Ethics and Conduct as part of its rules, which establishes the basis for the real estate professional’s conduct and has the force and effect of law.

• The canons are as follows:

  • Fidelity: The agent’s primary duty is to represent the intrests of the client.

  • Integrity: The agent must be honest and morally sound.

  • Competency: The agent must be knowledgeable about national, state, and local issues and conditions.

Consumer Protection Notice: The broker must display a notice concerning the real estate recovery trust account.

Discriminatory practice: The agent may not discriminate based on legally protected classes.