Avoid These Five Common Ethics Violations

By the Professional Standards Committee

These five cases were recently heard by the Salt Lake Board of Realtors® Professional Standards Committee. This information is intended to provide additional training and guidance to members on how to represent their clients more effectively. Case #1 – The Respondent made disparaging comments on Facebook related to a competitor. The ad continued to run after being notified of the complaint. The Hearing Panel found the Respondent in violation of Article 15 of the Code of Ethics and was fined $500 and required to take an additional COE class without CE credit. Case #2 – The Respondent scheduled a showing with Complainant’s listing. Showing instructions for the listing required Covid-19 safety precautions be followed including – no more than 2 people at a time in the home, no children, wearing of masks, gloves and booties among other things noted in the showing instructions. The Respondent allowed 3 people including a dog and child into the home in violation of the showing instructions. During the hearing, the Complainant’s client expressed her deep concern for the Respondent’s failure to follow the Covid-19 showing instructions and the fact that a dog and child were allowed in the home. The Respondent apologized for disregarding the showing instructions and

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explained that she did not intentionally mean to cause the Complainant’s clients any harm. The Hearing Panel found the Respondent in violation of Article 3 of the COE and was fined $500. Respondent was also required to take a live Code of Ethics course for no CE credit. Case #3 – The Complainant had an Exclusive BuyerBroker Agreement with a buyer. During the term of the Exclusive Buyer-Broker Agreement, the Respondent had communication with Complainant’s client about possible representation. The Respondent waived the right to attend the hearing and provided an apology letter in response to these actions. The Hearing Panel determined that the Respondent should have kindly referred the Complainant’s client to their agent and should not have engaged in such communication. The Respondent was found in violation of Article 16 of the COE and required to take a live COE course and Agency Law course, not for CE credit. A letter of reprimand will be held in Respondent’s file for 30 days. Case #4 – The Respondent represented a buyer who made an offer of $650,000 to purchase the Complainant’s home. The home was listed for $550,000. The Respondent provided the seller with an approval letter from the buyer’s lender. The approval letter indicated that the buyer was approved for the purchase price, subject to an appraisal and other conditions. The offer included a Financing condition, but did not include an Appraisal or Due Diligence contingency. The seller accepted the offer with the understanding that although the purchase price was significantly higher than the list price, the buyer was willing and capable of purchasing the home at that price. It was represented to the Complainant that a low appraisal would not be a problem and that the buyer had family money and was otherwise financially capable of purchasing the home for the contract price. The appraisal ultimately came in significantly below the purchase price. Shortly thereafter, the buyer submitted an addendum requesting a lower purchase price notwithstanding the fact that there was not an appraisal contingency. The seller did have back-up offers but because she had moved out of town and for various other personal reasons, she made the choice to not move forward with any back-up offer. She closed the transaction with the Respondent’s client at the lower purchase price. The seller felt upset that the Respondent had represented to her that his client was capable of purchasing the home at the higher offer price and that is why she had accepted his offer. The Hearing Panel determined that the Respondent did not act honestly in the presentation of his clients offer and that the buyer’s financial ability to purchase the property at the offer price was exaggerated. The Respondent was fined $500 and required to take the Mandatory Residential Course for no CE credit. Case #5 – The Complainant was represented by the Respondent on the purchase of a new home. At the beginning of the representation, the Respondent explained to the Complainant that she would provide a 40% commission discount or rebate to the Complainant. It wasn’t determined exactly how the discount would be received but it was discussed. The discount was never put in writing in clear and understandable terms. The transaction ended up taking two months longer to close than anticipated for various reasons. The day before settlement, the Respondent decided to not provide the commission discount that was discussed. The Complainant became upset and filed this complaint. The hearing panel determined that the Respondent failed to put the commission discount in writing and failed to sufficiently explain the discount in understandable terms. The Respondent was required to take a live Code of Ethics class for no CE credit and also the Mandatory Residential Class for no CE credit.