Code of Ethics
Code of Ethics and Standards of Practice
Effective January, 2013
Where the word PSM (Propertyshelf Member) is used in this Code and Preamble, it shall be deemed to include PSM-Associates. When used in this document PSM shall mean any user of MLS Ecuador.com that is using same to sell, market, purchase, acquire real estate or transact any other business relating to the sale and purchase of real estate. As used in this Code of Ethics, “client” means the person(s) or entity(ies) with whom a PSM or a PSM’s firm has an agency or non-agency relationship; “customer” means a party to a real estate transaction who receives information, services, or benefits but has no contractual relationship with the PSM or the PSM’s firm; “prospect” means a purchaser, seller, tenant, or landlord who is not subject to a representation relationship with the PSM or PSM’s firm; “agent” means a real estate professional acting in an agency relationship as defined by state law or regulation; and “broker” means a real estate professional (including brokers and sales associates) acting as an agent or in a non-agency capacity.
While the Code of Ethics establishes obligations that may be higher than those mandated by law, in any instance where the Code of Ethics and the law conflict, the obligations of the law must take precedence.
Modifications to existing Code of Ethics, Standards of Practice and additional new Standards of Practice are approved from time to time. Readers are cautioned to ensure that the most recent publications are utilized.
Wise utilization and widely allocated ownership depend upon the survival and growth of free institutions and of our civilization. PSMs should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership. They require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms, and the preservation of a healthful environment.
Such interests impose obligations beyond those of ordinary commerce. They impose grave social responsibility and a patriotic duty to which PSMs should dedicate themselves, and for which they should be diligent in preparing themselves. PSMs, therefore, are zealous to maintain and improve the standards of their calling and share with their fellow PSMs a common responsibility for its integrity and honor.
In recognition and appreciation of their obligations to clients, customers, the public, and each other, PSMs continuously strive to become and remain informed on issues affecting real estate and, as knowledgeable professionals, they willingly share the fruit of their experience and study with others. They identify and take steps, through enforcement of this Code of Ethics and by assisting appropriate regulatory bodies, to eliminate practices which may damage the public or which might discredit or bring dishonor to the real estate profession. PSMs having direct personal knowledge of conduct that may violate the Code of Ethics involving misappropriation of client or customer funds or property, willful discrimination, or fraud resulting in substantial economic harm, bring such matters to the attention of the appropriate Board or Association.
Realizing that cooperation with other real estate professionals promotes the best interests of those who utilize their services, PSMs urge exclusive representation of clients; do not attempt to gain any unfair advantage over their competitors; and they refrain from making unsolicited comments about other practitioners. In instances where their opinion is sought, or where PSMs believe that comment is necessary, their opinion is offered in an objective, professional manner, uninfluenced by any personal motivation or potential advantage or gain.
PSMs strive to have competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations. No inducement of profit and no instruction from clients ever can justify departure from this ideal.
In the interpretation of this obligation, PSMs can take no safer guide than that which has been handed down through the centuries, embodied in the Golden Rule, “Whatsoever ye would that others should do to you, do ye even so to them.” Accepting this standard as their own, PSMs pledge to observe its spirit in all of their activities whether conducted personally, through associates or others, or via technological means, and to conduct their business in accordance with the tenets set forth below.
Duties to Clients and Customers
When representing a buyer, seller, landlord, tenant, or other client as an agent, PSMs pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve PSMs of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, PSMs remain obligated to treat all parties honestly.
Standard of Practice 1-1
PSMs, when acting as principals in a real estate transaction, remain obligated by the duties imposed by this Code of Ethics.
Standard of Practice 1-2
The duties imposed by this Code of Ethics encompass all real estate-related activities and transactions whether conducted in person, electronically, or through any other means. The duties the Code of Ethics imposes are applicable whether PSMs are acting as agents or in non-agency capacities except that any duty imposed exclusively on agents by law or regulation shall not be imposed by this Code of Ethics on PSMs acting in non-agency capacities.
Standard of Practice 1-3
PSMs, in attempting to secure a listing, shall not deliberately mislead the owner as to market value. Nor shall they be allowed to accept, offer or promote Net Listings on MLS Ecuador.com. A Net Listing is defined as a listing in which the broker's commission is the excess of the sale price over an agreed-upon (net) price to the seller.
Standard of Practice 1-4
PSMs, when seeking to become a buyer/tenant representative, shall not mislead buyers or tenants as to savings or other benefits that might be realized through use of the PSM’s services.
Standard of Practice 1-5
PSMs shall submit offers and counter-offers objectively and as quickly as possible.
Standard of Practice 1-6
When acting as listing agents, PSMs shall continue to submit to the seller/landlord, or seller/landlord's agents, all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing. PSM's are required to change the listing status on MLS Ecuador.com to “Pending” after an offer has been accepted by the seller/landlord. PSMs shall not recommend that sellers/landlords accept an offer a pre-existing purchase contract or lease exists. If the client would like to accept such an offer it is recommended that the client obtain the advice of legal counsel prior to acceptance of a subsequent offer except where the acceptance is contingent on the termination of the pre-existing purchase contract or lease.
Standard of Practice 1-7
PSMs, acting as agents/brokers of buyers/tenants, shall submit to buyers/tenants, or buyer/tenant's agent, all offers and counter-offers until acceptance. PSMs, acting as agents/brokers of buyers/tenants, shall recommend that buyers/tenants obtain the advice of legal counsel if there is a question as to whether a pre-existing contract has been terminated.
Standard of Practice 1-8
The obligation of PSMs to preserve confidential information provided by their clients in the course of any agency relationship or non-agency relationship continues after termination of agency relationships or any non-agency relationships PSMs shall not knowingly, during or following the termination of professional relationships with their clients:
1) reveal confidential information of clients; or
2) use confidential information of clients to the disadvantage of clients; or
3) use confidential information of clients for the PSM’s advantage or the advantage of third parties unless:
a) clients consent after full disclosure; or
b) PSMs are required by court order; or
c) it is the intention of a client to commit a crime and the information is necessary to prevent the crime; or
d) it is necessary to defend a PSM or the PSM’s employees or associates against an accusation of wrongful conduct.
Information concerning latent material defects is not considered “confidential information” under this Code of Ethics
Standard of Practice 1-9
When entering into listing contracts, PSMs must advise sellers/ landlords of:
1) the PSM’s company policies regarding cooperation and the amount(s) of any compensation that will be offered to subagents, buyer/tenant agents, and/or brokers acting in non-agency capacities;
2) the fact that buyer/tenant agents or brokers, even if compensated by listing brokers, or by sellers/landlords may represent the interests of buyers/tenants; and
3) any potential for listing brokers to act as disclosed dual agents, e.g., buyer/tenant agents.
Standard of Practice 1-10
When entering into buyer/tenant agreements, PSMs must advise potential clients of:
1) PSM’s company policies regarding cooperation;
2) the amount of compensation to be paid by the client;
3) the potential for additional or offsetting compensation from other brokers, from the seller or landlord, or from other parties;
4) any potential for the buyer/tenant representative to act as a disclosed dual agent, e.g., listing broker, subagent, landlord’s agent, etc., and
5) the possibility that sellers or sellers’ representatives may not treat the existence, terms, or conditions of offers as confidential unless confidentiality is required by law, regulation, or by any confidentiality agreement between the parties.
Standard of Practice 1-11
PSM's, for the protection of all parties, shall assure whenever possible that all agreements related to real estate transactions including, but not limited to, listing and representation agreements, purchase contracts, and leases are in writing in clear and understandable language expressing the specific agreement and commitments of the parties. A copy of each agreement shall be transmitted to each party within a reasonable time after any parties' signing or initialing.
Standard of Practice 1-12
For the protection of all parties, PSMs shall use reasonable care to ensure that documents pertaining to the purchase, sale, or lease of real estate are kept current through the use of written extensions or amendments.
Standard of Practice 1-13
When assisting or enabling a client or customer in establishing a contractual relationship (e.g., listing and representation agreements, purchase agreements, leases, etc.) electronically, PSMs shall make reasonable efforts to explain the nature and disclose the specific terms of the contractual relationship being established prior to it being agreed to by a contracting party.
Standard of Practice 1-14
The services which PSMs provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction, and international real estate.
PSMs shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. PSMs shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law.
Factors defined as “non-material” by law or regulation or which are expressly referenced in law or regulation as not being subject to disclosure are considered not “pertinent” for purposes of Article 2.
Duties Regarding Personal Interests
Standard of Practice 3-1
PSMs shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner’s agent or broker. In selling property they own, or in which they have any interest, PSM's shall reveal their ownership or interest in writing to the purchaser or the purchaser’s representative.
Standard of Practice 3-2
PSMs shall not undertake to provide professional services concerning a property or its value where they have a present or contemplated interest unless such interest is specifically disclosed to all affected parties. PSMs shall not recommend or suggest to a client or a customer the use of services of another organization or business entity in which they have a direct interest without disclosing such interest at the time of the recommendation or suggestion. When recommending real estate products or services (e.g., homeowner’s insurance, warranty programs, mortgage financing, title insurance, etc.), PSMs shall disclose to the client or customer to whom the recommendation is made any financial benefits or fees, other than real estate referral fees, the PSM or PSMd’s firm may receive as a direct result of such recommendation.
Duties to Other Real Estate Professionals
PSMs shall cooperate with other brokers except when cooperation is not in the client’s best interest.
Standard of Practice 4-1
PSMs, acting as exclusive agents or brokers of sellers/landlords, establish the terms and conditions of offers to cooperate. When posting listings on MLS Ecuador.com, the agent must (a) pay the amount to MLS Ecuador.com that is advertised and required to be paid to post the listing on MLS Ecuador.com, (b) express the willingness to cooperate with the terms and conditions advertised on the listing (c) pay to the cooperating agent that amount at the time of closing, unless otherwise agreed upon in writing
Standard of Practice 4-2
PSMs shall, with respect to offers of compensation to another PSM, timely communicate any change of compensation for cooperative services to the other PSM prior to the time such PSM produces an offer to purchase/lease the property. If an offer is submitted within 24 hours of a compensation change, the prior compensation rate applies for a period of 24 hours after the change. Standard of Practice 4-2 does not preclude the listing broker and cooperating broker from entering into an agreement to change cooperative compensation.
Standard of Practice 4-3
PSMs, acting as listing brokers, have an affirmative obligation to disclose the existence of dual or variable rate commission arrangements (i.e., listings where one amount of commission is payable if the listing broker’s firm is the procuring cause of sale/lease and a different amount of commission is payable if the sale/lease results through the efforts of the seller/landlord or a cooperating broker). The listing broker shall, as soon as practical, disclose the existence of such arrangements to potential cooperating brokers and shall, in response to inquiries from cooperating brokers, disclose the differential that would result in a cooperative transaction or in a sale/lease that results through the efforts of the seller/landlord. If the cooperating broker is a buyer/tenant representative, the buyer/ tenant representative must disclose such information to their client before the client makes an offer to purchase or lease.
Standard of Practice 4-4
It is the obligation of subagents to promptly disclose all pertinent facts to the principal’s agent prior to as well as after a purchase or lease agreement is executed.
Standard of Practice 4-5
PSMs shall disclose the existence of accepted offers, including offers with unresolved contingencies, to any broker seeking cooperation.
Standard of Practice 4-6
When seeking information from another PSM concerning property under a management or listing agreement, PSMs shall disclose their status and whether their interest is personal or on behalf of a client and, if on behalf of a client, their representational status.
Standard of Practice 4-7
PSMs shall not misrepresent the availability of access to show or inspect a listed property.
Duties Regarding Commissions and Funds
Standard of Practice 5-1
PSMs shall not accept any accept any commission, rebate, or profit on expenditures made for their client, without the client’s knowledge and consent. In a transaction, PSMs shall not accept compensation from more than one party, even if permitted by law, without disclosure to all parties and the informed consent of the PSM’s client or clients.
Duties Regarding the Public
PSMs shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, or national origin. PSMs shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin. PSMs shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, or national origin.
Standard of Practice 7-1
The obligation to present a true picture in representations to the public includes information presented, provided, or displayed on PSM's websites. PSMs shall use reasonable efforts to ensure that information on their websites is current. When it becomes apparent that information on a PSM’s website is no longer current or accurate, PSMs shall promptly take corrective action within 24 hours of notice of the error.
Standard of Practice 7-2
PSM's obligation to present a true picture in their advertising and representations to the public includes the URLs and domain names they use, and prohibits PSMs from:
1) engaging in deceptive or unauthorized framing of real estate brokerage websites; or
2 )manipulating (e.g., presenting content developed by others) listing content in any way that produces a deceptive or misleading result.
Standard of Practice 7-3
The obligation to present a true picture in advertising, marketing, and representations allows PSMs to use and display only professional designations, certifications, and other credentials to which they are legitimately entitled.
PSMs shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction requires it.
Standard of Practice 9-1
If charged with unethical practice or asked to present evidence or to cooperate in any other way, in any professional standards proceeding or investigation, PSMs shall place all pertinent facts and shall take no action to disrupt or obstruct such processes. PSMs shall not make any unauthorized disclosure or dissemination of the allegations, findings, or decision developed in connection with an ethics hearing or appeal or in connection with an arbitration hearing or procedural review.
Standard of Practice 9-2 PSMs shall not obstruct MLS Ecuador's or any other investigative tribunal's investigative or professional standards proceedings by instituting or threatening to institute actions for libel, slander, or defamation against any party to a professional standards proceeding or their witnesses based on the filing of an arbitration request, an ethics complaint, or testimony given.
Standard of Practice 9-3 PSMs shall not intentionally impede MLS Ecuador's or any other investigative tribunal's investigative or disciplinary proceedings by filing multiple ethics complaints based on the same event or transaction.
PSMs shall not knowingly or recklessly make false or misleading statements about competitors, their businesses, or their business practices.
Standard of Practice 10-1
PSMs shall not knowingly or recklessly file false or unfounded ethics complaints.
Standard of Practice 10-2 The obligation to refrain from making false or misleading statements about competitors’ businesses and competitors’ business practices includes the duty to not knowingly or recklessly repeat, retransmit, or republish false or misleading statements made by others. This duty applies whether false or misleading statements are repeated in person, in writing, by technological means (e.g., the Internet), or by any other means.
PSMs shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other real estate professionals have with clients.
Standard of Practice 11-1
Article 11 is not intended to prohibit aggressive or innovative business practices which are otherwise ethical and does not prohibit disagreements with other real estate professionals involving commission, fees, compensation or other forms of payment or expenses.
Standard of Practice 11-2
Article 11 does not preclude PSMs 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 real estate professional. 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. Article 11 is intended to recognize as unethical two basic types of solicitations:
1) 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 real estate professional; and
2) mail or other forms of written solicitations including direct email to prospects whose properties are exclusively listed with another real estate professional when such solicitations are not part of a general mailing/eblast but are directed specifically to property owners identified through compilations of current listings.
Standard of Practice 11-3
Article 11 does not preclude PSMs 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 PSMs to whom such offers to provide services may be made.
Standard of Practice 11-4
PSMs shall not solicit a listing which is currently listed exclusively with another broker.
Standard of Practice 11-5
When PSMs are contacted by the client of another real estate professional regarding the creation of an exclusive relationship to provide the same type of service, and PSMs 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.
Standard of Practice 11-7
The fact that a prospect has retained a real estate professional as an exclusive representative or exclusive broker in one or more past transactions does not preclude other PSMs from seeking such prospect’s future business.
Standard of Practice 11-8
The fact that an exclusive agreement has been entered into with a real estate professional shall not preclude or inhibit any PSM from entering into a similar agreement after the expiration of the prior agreement.
Standard of Practice 11-9
PSMs, 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.
Standard of Practice 11-10
PSMs, 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. PSMs, 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.
Standards of Practice 11-13
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, PSMs shall ask prospects whether they are a party to any exclusive representation agreement. PSMs 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.
Standard of Practice 11-14
PSMs 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.
Standard of Practice 11-15
In cooperative transactions PSMs shall compensate cooperating real estate professionals and shall not compensate nor offer to compensate, directly or indirectly, any of the sales agents employed by or affiliated with other PSMs without the prior express knowledge and consent of the cooperating agent/broker.
Standard of Practice 11-16
PSMs, 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. PSMs, 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.
Standard of Practice 11-18
PSMs 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.
Standard of Practice 11-19
Signs giving notice of property for sale, rent, lease, or exchange shall not be placed on property without consent of the seller/landlord.
Mediation and Arbitration
Standard of Practice 12-1
In order to resolve disputes between parties and avoid costly litigation proceedings, MLS Ecuador will delegate a mediation panel to manage conflict resolution. The panel is to be comprised of 2 MLS Ecuador partners and 3 elected broker members. The broker members are to be elected annually, at the beginning of the year. Upon receiving a written complaint by one member regarding the actions of another member or members, both parties to the dispute will be given the opportunity to submit their case to the mediation panel. If both parties agree in writing to adhere to the mediation panel's authority, then the panel will hear statements by both parties and recommend an action. If both parties agree to submit to the ruling of the mediation panel, then the panel will hear statements by both parties and reach a decision. In cases in which a member of the mediation panel is party to a dispute, another person agreed to be independent by both parties will serve on the panel in their place. Refusal to submit to the authority of the mediation panel without just cause (e.g. conflict of interest, reasonable expectation of bias
If either or both parties are unwilling to submit to the mediation panel's decision, the case will be transferred to the The Arbitration and Mediation Centre of the Ecuadorian American Chamber of Commerce.
MLS Ecuador therefore requires that its members adhere to the following Arbitration Clause:
Arbitration Clause. Any and all disputes, claims, differences or controversies arising out of or in relation to any aspect of this Agreement, its business matter, performance, liquidation, interpretation, validity or any breach thereof, shall be resolved by arbitration in accordance with the bylaws of the The Arbitration and Mediation Centre of the Ecuadorian American Chamber of Commerce.
Standard of Practice 12-2
In the future, MLS Ecuador may elect to place all matters of arbitration and dispute mediation under the responsibility of a capable National Association of Realtors who shares a belief in the aforementioned standards and promises to adhere to their own reasonable interpretation of this Code of Ethics. In such a case, MLS Ecuador will retain final decision making power in any case where the association advocates for the termination of a member account, and will remain fully informed of all arbitration proceedings. If MLS Ecuador believes at any point that the values expressed in this Code of Ethics are not being upheld, MLS Ecuador will act as an advisor to the Association, to remind them of their ethical obligations expressed herein.