Evening star., 1915-12-25
ETHICS ARE ESSENTIAL
IN REALTY PROFESSION
Necessary if Dignifed Standard Is
to Be Maintained, Says
Writer.
Chairman of National Committee
Discusses Mooted Questions
Concerning Brokers.

If the real estate business is to be
dignified to the standard of profess
sion. a code of ethics as a rule of con-
duct and practice for the guidance of
the beginner as well as those of more
experience is essential. Other pro-
fessions. such as those of medicine.
law and architecture, have their codes
of ethics. and it is equally important
that a high standard should be held to
by those following the business of
real estate, says E. Orris Hart. chair
man of the committee on ethics of
the National Association of Real Es-
tate Exchanges, in the National Real
Estate Magazine.
Why do we need a recognized stand
ard of cohduct-in other words a code
of ethics? Our own self-respect and
highest success in our calling demand
it. We need it to regulate and deter
mine upon commonly accepted and
honorable basis our relations with our
clients. our customers and our fellow
brokers', as we'll as the general public.
Should Be Practiced,
While some of the provisions of the
code of ethics adopted by the National
Association of Real Estate Exchanges
at the Los Angeles convention last
June might be said to be elementary
and self-evident-so automatic and OBJ
viously right that they should be prac-
ticed as a matter OF course--yet such
is the Iooseness with which some view
even the most elemental moral obli-
cations to their fellow-men that the
setting down in a code OF dennlte rules
of acton as guide to. him who wants
tI,y, and
the other whose selnsh instincts IN
cline him to trespass on the rights OF
others--a measuring stick, as IL were.
by which the man of high standard
may be commended and the transgres-
sor condemned and possibly disciplined
seems to be essential. At any rate,
we are simply following the prece-
dents found desirable by other profes-
sions when we formally adopt tor our
guidance a code of ethics.
Questions Settled by Code.
Among the sometimes mooted ques-
tions affecting real estate brokers, the
right or wrong of which are definitely
settled by the provisions of the code,
the following are worthy of special
comment:
Cd An agent has no right to sell his
own property to his client or himself
buy a property from client who is
pa ying him a commission for his serv-
ices as agent, unless he has his client s
full knowledge and consent; nor is 1t
permissible for a broker in the employ
and pay of one of the parties to 4 deal
to take compensation from the other
party to the transaction without the
knowledge and consent Of each.
(2) A broker should not try to "go
around" an exlusive agency he knows
Is held by fellow-broker. The high
,est good of the business both in the
way of service to clients and custom
ers as well as fair dealing with fell
W-brokers requires Willingness at all
times to cooperate with the agent ex-
clusively representing one side of the
deal, on the basis of an equitable di-
vision of the resulting commissions.
Concerning Property. Listings.
(s) Paragraph of section 3 of the
new code seems to very fairly dispose
of the delicate question which often
comes up between brokers who fire.
quently exchange listings in that it
defines the duration of the term dur
ing which a broker who has accepted
a listing from a fellow broker is
bound to recognize that broker if any
deal results. and indicates under what
circumstances it may be permissible
for the broker having formerly re-
ceived such information to do busi-
ness direct with the owner. or through
some other channel, this being permis-
sible in cases where the instrumental
ity of the broker first giving out the
information is clearly shown to have
ceased and the property or customer
has come to the other broker through
an entirely different instrumentality.
90 There is also provision against
relaying property-in other words, a
broker having had property listed
with him by fellow-broker should
not relist it with a third broker with
out the consent of the broker from
whom he received the listing.
True Consideration Advocated.
60 The naming of fictitious consid-
erations in deeds of conveyance is also
condemned.
(6) Another important provision of
the code is that all controversies be-
tween members of the real estate board
shall be settled by arbitration rather
than by a suit at law.
CO The code makes it a duty to the
public and to fellow-members to re-
port to the board fraudulent misrepre-
sentations or illegal acts pertaining to
real estate which may work injury to
innocent or ignorant persons, and
makes 1t the duty of the board to the
community to take steps to stop such
practices and punish parties guilty Of
them. The code also makes it the duty
of the local board to punish by proper
discipline violators of its adopted rules
of ethical conduct.
OF course, the PRONUNCIATION by the
real estate board of a code of ethics
is not going to transform all of its
members into models of virtue and pro-
priety at once, but it will be a step in
the right direction, tending ultimately
to separate the sheep from the goats
to eliminate the crooked broker and
greatly assist in raising the business
of managing. improving, buying and
tinent to a generally recognized plane
Of responsible and honored profess
sion.