Sample Ethics Cases

Ethics Case Example #1

Client X listed his unique parcel of land on a lake exclusively with REALTOR® A, who worked diligently for months to sell Client X’s property. Finally, REALTO® A came up with the idea of selling the property to the county for a park, and made arrangements for its presentation at a special meeting.

Client X went before the County Commissioners with his attorney. REALTOR® A, the listing broker, was in the audience. REALTOR® A commented about the property and told the County Commissioners, that if the County purchased the property he, REALTOR® A, would receive a real estate commission. The County Commissioners agreed to take the matter under advisement.

REALTOR® B, a member of the County Commission, approached Client X and suggested that if the property were listed with REALTOR® B exclusively, and REALTOR® B then cooperated with REALTOR® A so that the real estate commission would be split between them, the County would probably purchase the property from Client X. Otherwise, REALTOR® B indicated, the County would not purchase it. Unknown to Client X, the County Commissioners had already voted to buy the land. Worried that he might not sell the land, Client X immediately signed a second written exclusive listing with REALTOR® B. Thereafter, a sales contract was executed which provided that the real estate commission was to be divided equally between REALTOR® A and REALTOR® B. Unknown to REALTOR® B, Client X had told REALTOR® A the entire story about REALTOR® B’s approach to and conversation with Client X.

REALTOR® A filed a complaint against REALTOR® B alleging violations of Article 1 and Article 16.

Is there a possible violation of Article 1?
Is there a possible violation of Article 16?
Should case be dismissed?
Should case be sent to Professional Standards Committee for a hearing?

Conclusion

The Grievance Committee Panel determined that the complaint should be forwarded to the Professional Standards Committee for a hearing. The Hearing Panel concluded that REALTOR® B had used his official position as County Commissioner to deceive Client X with respect to the prospects of the County purchasing his property and had coerced Client X into executing an exclusive listing while the property was already listed exclusively with REALTOR® A. The Hearing Panel found REALTOR® B in violation of Article 1 for having advised Client X dishonestly and Article 16 for having acted inconsistently with the exclusive relationship that existed between Client X and REALTOR® A.

Ethics Case Example #2

REALTOR® C contacted REALTOR® D to ask if his listing on South Street was still available and it there was anything pending on it. REALTOR® D said there was no major interest at that time. REALTOR® C wrote an offer and submitted it by fax that evening.

The offer was open for acceptance until 5 pm the following day (Thursday). After not hearing from REALTOR® D by 5 pm on Thursday evening, REALTOR® C called REALTOR® D.REALTOR® D informed REALTOR® C that she had not yet heard from her clients who happened to be a relocation company. REALTOR® D then asked for more time. REALTOR® C checked with her clients and they agreed to wait until 5 pm on Friday.

On Friday, REALTOR® D left REALTOR® C a message stating her sellers had accepted another offer. REALTOR® C returned REALTOR® D’s call and asked why she was not informed of multiple offers. REALTOR® D said she did inform REALTOR® C that there was another offer. REALTOR® C denies that REALTOR® D ever told her of another offer and informed REALTOR® D that she would file a complaint with the Board as REALTOR® D did not allow her clients to submit their best offer and that REALTOR® D was not working in her seller’s best interest. REALTOR® D then disclosed that the seller had not signed off on the contract and wouldn’t until Monday. REALTOR® D then asked if REALTOR® C wanted to consult her clients and submit another offer. REALTOR® C explained the situation to her clients who then stated that they were no longer interested in the property due to the circumstances.

A complaint was sent to the Board by REALTOR® C charging that REALTOR® D had violated article 1 of the Code of Ethics by not disclosing that there were multiple offers and that he tried to portray the property as having an accepted offer, when the seller had not even signed off on the offer.

REALTOR® D responded to the complaint that he had informed REALTOR® C of a pending contract and that the sellers were out of town, owned by a relocation company. Both contracts were submitted at the same time and the sellers chose the higher bid contract. REALTOR® D stated that upon hearing this information REALTOR® C was very upset and that he, REALTOR® D, told REALTOR® C that they could submit another offer as the one accepted was not yet finalized. REALTOR® C did not respond with another offer, but an offer was submitted and accepted from REALTOR® E’s clients which was better than the first or second offer.

REALTOR® D believes he acted ethically and professionally and in the best interests of his clients. REALTOR® C was given the opportunity to submit another offer as the sellers had not yet finalized a contract.

Is there a possible violation of Article 1?
Should case be dismissed?
Should case be sent to Professional Standards Committee for a hearing?

Conclusion

The Grievance Committee Panel determined that the complaint, even if the allegations are true, does not support a violation of the Code of Ethics. This case was dismissed.

Ethics Case Example #3

The prospective buyer further stated that REALTOR® G (her REALTOR®) had given her the lock box code which she wrote on a post-it note and she was unable to find and was letting Client Z’s sister to come secure the property.

Client Z believed REALTOR® G to be in violation of article 1 of the Code of Ethics as REALTOR® G left a prospective buyer alone in a property prior to sale and allowed the prospective buyer to bring in unsupervised tradespeople prior to sale. Also, Client Z was very concerned that the REALTOR® G could not have been sure the property would be secure and Client Z’s mother had not yet removed all of her possessions.

REALTOR® G responded that she had set up an appointment with REALTOR® H for the prospective buyer to meet with the painter and carpet installers. REALTOR® G was running late and the prospective buyer phoned to let her know that she and the contractors were waiting at the home. REALTOR® G, knowing that she would be at the home within 10-15 minutes, gave the prospective buyer the code to the lock box. REALTOR® G arrived and stayed with the buyer and contractors for about an hour. REALTOR® G had an appointment with out of town buyers. When REALTOR® G was leaving the home to meet with her next appointment, the prospective buyer told REALTOR® G that she felt sick and needed to use the bathroom. REALTOR® G then showed the prospective buyer how to lock the lockbox and left.

REALTOR® G received a call from REALTOR® H stating that his client was very upset and was going to file a complaint. REALTOR® G explained the situation and apologized stating that the prospective buyer was 80 years old and it was unusual circumstances.

Is there a possible violation of Article 1?
Should case be dismissed?
Should case be sent to Professional Standards Committee for a hearing?

Conclusion

The Grievance Committee Panel determined that the complaint should be forwarded to the Professional Standards Committee for a hearing. The Hearing Panel concluded that REALTOR® G violated Article 1 based on the fact that she left the property unsecured without the knowledge and consent of the seller.