don’t let this happen to you! Submitted by Sandy Rosengarden, Executive VP, Century 21 Redwood Realty Playing Fast and Loose with the Facts Will Land You in Time-out! Have you ever had a client who was so picky, so rigid, so inflexible that it was almost impossible to satisfy him or her? Did you ever think, “Wow, if I stopped paying attention to every silly little instruction, it would be so much easier to get this transaction done! In fact, it would actually be in the client’s best interest!” Oops! You’ve just gone down a slippery slope that quickly leads to violating the fiduciary responsibility that’s usually listed first: OBEDIENCE. Furthermore, the National Association of REALTORS® Code of Ethics Article 2 states in part: “REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction.” You may convince yourself that not following your client’s instructions or that making a “minor” alteration to a document is okay as long as it helps achieve the result you believe is desired. But think again and ponder the sad tale of REALTOR® Shawn Shortcut from Case #2-16.
questionable credit histories, he felt that Trouble was a good risk despite the dings on his credit report. REALTOR® Shortcut therefore edited his copy of the credit report to remove the references to past-due accounts. Tenant Tommy Trouble paid his first month’s rent and a security deposit equal to one month’s rent and moved in.
REALTOR® Shortcut, a property manager, had an agreement to manage Ralph Rigid’s 24-unit apartment building. During the course of their negotiations, Mr. Rigid repeatedly emphasized that REALTOR® Shortcut was expected to use great care in screening the credit histories of potential tenants.
Early the following month, our hapless REALTOR®, Shawn Shortcut, noted that he had not received Trouble’s rent check. He called Trouble only to learn that his phone had been disconnected. Visiting the unit and getting no response after knocking, he let himself into the apartment to discover that Trouble was gone, but he had left a whole lot of trouble behind. Damage to the unit was extensive. Further investigation found that Tenant Trouble had left the state with no forwarding address. Unfortunately, there was so much damage to the unit that it could not be covered by the security deposit.
Several months later, REALTOR® Shortcut received an application from prospective Tenant Tommy Trouble. Trouble’s credit history was generally satisfactory, but indicated that he was several months in arrears on various store credit accounts. REALTOR® Shortcut was anxious to rent the unit and, even though he recognized that his management agreement with Landlord Rigid precluded renting to individuals with
Upon learning of the situation, Landlord Ralph Rigid instructed his attorney, Thad Thorough, to try to locate Trouble. Attorney Thorough asked REALTOR® Shortcut for the complete Trouble file. In reviewing the documents, Thorough noted that the credit report appeared to have been altered. He ordered a new report and found the discrepancies. The attorney reported this to his client, Ralph Rigid, who promptly filed a complaint alleging that Article 2
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had been violated. At the hearing, REALTOR® Shortcut admitted he’d altered the report but defended his action, saying the credit report was generally satisfactory and that Ralph Rigid’s unbending insistence on unblemished credit histories made it needlessly difficult to find tenants, which, ultimately, was not in Landlord Rigid’s best interests. Not surprisingly, members of the Hearing Panel concluded that REALTOR® Shortcut’s defense was unfounded and that in altering the credit report he had knowingly misrepresented a pertinent fact in order to circumvent specific instructions from his principal. Therefore, Shawn Shortcut was found to have violated Article 2. But, in addition to violating Article 2, REALTOR® Shortcut had also violated his fiduciary duty of obedience. It’s important to remember that, even if an action that circumvents a client’s instructions doesn’t violate the Code of Ethics in itself, it is still an offense against your duties as an agent. Read the full case here: www.https://bit.ly/2stB3Eu
Don’t Let This Happen to You!
This issue features women in real estate and highlights from the GCAAR Recognition Awards.