Ethics and Business Practice - REIC2600

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Table of contents :
2600 - Student Course Manual - 2020
2600 - Student Course Manual - 2020 Appendices
REALTORCode.pdf
PREAMBLE
THE REALTOR® CODE OF ETHICS
STANDARDS OF BUSINESS PRACTICE
1. Informed of Essential Facts
2. Disclosure of Role - Agency
3. Primary Duty to Client
4. Discovery of Facts
5. Written Service Agreements
6. Written Transaction Agreements
7. Expenses Related to the Transaction
8. Disclosure of Benefits to Clients
9. Disclosure of Benefits to Customers
10. Outside Professional Advice
11. Personal Interest in Property
12. Skilled and Conscientious Service
13. Advertising - Content/Accuracy
14. Advertising Listings of Other REALTORS®
15. Advertising Claims
16. Discrimination
17. Compliance with Board/ Association Bylaws
18. Compliance with Statutory Requirements
19. Discrediting another Registrant
20. Respecting Contractual Relationships
21. Conduct Unbecoming
22. Principal (Broker) Responsibility
23. Cooperation with Board/Association
24. Arbitration
25. Inter-Board and Inter-provincial Arbitration
26. Avoid Controversies
27. CREA Trademarks
28. Intellectual Property Rights of Boards/ Associations
29. REALTOR® Acting as Principal
DEFINITIONS
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REIC 2600

ETHICS AND BUSINESS PRACTICE

REAL ESTATE INSTITUTE OF CANADA 208-5407 Eglinton Ave. West Toronto, ON M9C 5K6 Toll Free: 1.800.542.7342 Email: [email protected] www.reic.ca

2020 VERSION

This Guide has been prepared for information purposes only, and although care has been taken in its preparation, the Real Estate Institute of Canada (REIC) does not warrant the accuracy of the detailed information herein contained. This Guide is not intended and should not be relied upon as supplying legal advice. REIC assumes no liability for any damage, injury or expense that may be incurred or suffered as a result of this publication. ©No part of this text may be reproduced in any form by any photographic, electronic, mechanical or other means, or used in any information storage and retrieval system, without the written permission of the Real Estate Institute of Canada.

TABLE OF CONTENTS ETHICS AND BUSINESS PRACTICE CHAPTER ONE: INTRODUCTION TO ETHICS AND BUSINESS PRACTICE 1-1 INTRODUCTION TO THE COURSE .............................................................................................................. 5 1-2 ABOUT THE COURSE AUTHOR .................................................................................................................. 6 1-3 COURSE OBJECTIVES ............................................................................................................................... 7 1-4 PERSONAL OBJECTIVES ............................................................................................................................ 7 1-5 IN-CLASS ASSIGNMENT #1: THE DRUG TEST .............................................................................................. 8 1-6 IN-CLASS ASSIGNMENT #2: THE CONFIDENTIALITY SURVEY ....................................................................... 8 1-7 CHART - REAL ESTATE PROFESSIONALISM ................................................................................................ 9

CHAPTER TWO: REAL ESTATE AND ETHICS 2-1 WHAT ARE ETHICS? ............................................................................................................................... 15 2-2 THREE IMPORTANT ETHICAL QUESTIONS: ............................................................................................. 16 2-3 CONCEPTS ASSOCIATED WITH ETHICS .................................................................................................... 17 2-4 THE ETHICS PYRAMID ............................................................................................................................ 19 2-5 WHY DO WE STUDY ETHICS?.................................................................................................................. 20 2-6 THE REAL ESTATE PROFESSIONAL’S COMMITMENT TO ETHICS ................................................................ 21 2-7 WHY ARE ETHICS SO IMPORTANT IN THE REAL ESTATE PROFESSION? ...................................................... 22 2-8 FIVE CORE VALUES BASED UPON THE WORD TRUST ............................................................................... 23 2-9 ETHICS AND PROFESSIONAL CONDUCT................................................................................................... 24 2-10 ETHICS AND PROFESSIONAL STANDARDS ............................................................................................. 25 2-11 THE REAL ESTATE INSTITUTE OF CANADA: ETHICS ................................................................................. 26 2-12 MAJOR LINKS: ETHICS AND LAW .......................................................................................................... 28 2-13 ETHICS AND PROFESSIONALISM ........................................................................................................... 29 2-14 THE TWO COMPONENTS OF SUCCESS................................................................................................... 30 2-15 HONESTY AND ETHICAL RATINGS –SECTION ONE .................................................................................. 31 2-16 HONESTY AND ETHICAL RATINGS ......................................................................................................... 32 2-17 HONESTY AND ETHICAL RATINGS – SECTION TWO ................................................................................ 33 2-18 CONCLUSION – KEY POINTS ................................................................................................................. 34

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CHAPTER THREE: AN INTRODUCTION TO ETHICS 3-1 INTRODUCTION .................................................................................................................................... 39 3-2 THE MAJOR ETHICAL THEORIES AND HISTORICAL TRADITIONS ................................................................ 40 3-3 ARISTOTLE - GREEK PHILOSOPHER [384 – 322 BCE] ................................................................................. 41 3-4 ST AUGUSTINE OF HIPPO - GREEK PHILOSOPHER [354 – 430 A.D.] ........................................................... 42 3-5 JOHN STUART MILL – BRITISH PHILOSOPHER/ECONOMIST [1806-1873]................................................... 43 3-6 IMMANUEL KANT – GERMAN PHILOSOPHER [1724 -1804] ...................................................................... 44 3-7 THE FOUR ETHICAL QUESTS ................................................................................................................... 45 3-8 THE FIRST QUEST: ETHICS = EXCELLENCE ................................................................................................ 45 3-9 THE SECOND QUEST: ETHICS INCORPORATE MORAL LAW ....................................................................... 46 3-10 THE THIRD QUEST: ETHICS EMBODY AN ELEMENT OF HOLINESS ............................................................ 47 3-11 THE FOURTH QUEST: GOOD ETHICS LEADS TO HAPPINESS .................................................................... 51 3-12 THE THREE IMPERATIVES FOR HUMAN CONDUCT ................................................................................. 52 3-13 TEN VALUES WHICH DISTINGUISH CULTURES THAT FOSTER ETHICAL GROWTH ...................................... 53 3-14 ETHICAL ROLE MODELS: IN-CLASS ASSIGNMENT .................................................................................. 54 3-15 CONCLUSION – KEY POINTS ................................................................................................................. 55

CHAPTER FOUR: ETHICAL VALUES AND MORAL REASONING 4-1 DEVELOPING ETHICAL VALUES ............................................................................................................... 61 4-2 DEFINING VIRTUE AND CHARACTER ....................................................................................................... 62 4-3 REAL ESTATE PROFESSIONALS - CODE OF ETHICS AND PRACTICE STANDARDS .......................................... 63 4-4 MORAL CONFLICT ................................................................................................................................. 64 4-5 THE CONCEPT OF MORAL REASONING ................................................................................................... 66 4-6 MORAL REASONING AND JUDGMENT DEFINITIONS ................................................................................ 67 4-7 FEATURES OF THE IDEAL MORAL JUDGMENT ......................................................................................... 68 4-8 IN-CLASS ASSIGNMENT #1 – ASSESSING YOUR MORAL JUDGMENT ........................................................ 69 4-9 THE ETHICS CHECK ................................................................................................................................ 70 4-10 IN-CLASS ASSIGNMENTS #2 – “THE ETHICS CHECK” ............................................................................... 71 4-11 IN-CLASS ASSIGNMENT #3 – “THE RIGHT THING TO DO” ........................................................................ 73 4-12 CONCLUSION – KEY POINTS ................................................................................................................. 76

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REIC 2600 Ethics and Business Practice

CHAPTER FIVE: ETHICS AND DECISION-MAKING 5-1 ETHICS AND DECISION-MAKING ............................................................................................................. 81 5-2 PERSONALITY/DECISION-MAKING STYLES .............................................................................................. 82 5-3 PERSONALITY/ DECISION-MAKING STYLE – THE IDEALIST ........................................................................ 83 5-4 PERSONALITY/DECISION-MAKING STYLE – THE INDIVIDUALIST ............................................................... 83 5-5 PERSONALITY/DECISION-MAKING STYLE – THE PRAGMATIST .................................................................. 83 5-6 PERSONALITY/DECISION-MAKING STYLE – THE ALTRUIST ....................................................................... 84 5-7 WHAT IS YOUR DECISION-MAKING STYLE? ............................................................................................. 84 5-8 IN-CLASS ASSIGNMENT #1 ..................................................................................................................... 86 5-9 MASLOW’S HIERARCHY OF NEEDS ......................................................................................................... 87 5-10 IN-CLASS ASSIGNMENT #2 - REFLECTING ON MASLOW’S HIERARCHY ..................................................... 89 5-11 WHY STUDY THESE CONCEPTS?............................................................................................................ 91 5-12 IN-CLASS ASSIGNMENT #3 – SELF-ASSESSMENT .................................................................................... 94 5-13 CONCLUSION – KEY POINTS ................................................................................................................ 95

CHAPTER SIX: APPLIED ETHICS AND DECISION-MAKING 6-1 APPLIED ETHICS ................................................................................................................................. 101 6-2 A SYSTEMATIC APPROACH TO ETHICAL-MAKING: THE EIGHT-STEP PROCESS ........................................ 103 6-3 IN-CLASS ASSIGNMENT – YOUR DECISION-MAKING PROCESS............................................................... 105 6-4 ETHICAL DECISION-MAKING WORKSHEET - THE EIGHT-STEP PROCESS .................................................. 106 6-5 INSTITUTE OF REAL ESTATE MANAGEMENT – FIVE QUESTION METHOD ............................................... 107 6-6 IN-CLASS ASSIGNMENT #2 – THE IREM APPROACH .............................................................................. 107 6-7 ETHICS AND THE ART OF REAL ESTATE NEGOTIATIONS ........................................................................ 108 6-8 THE DECISION-MAKING PROCESS – A SUMMARY ................................................................................. 110 6-9 PUTTING YOUR DECISION-MAKING STYLE INTO PRACTICE ................................................................... 112 6-10 CONCLUSION – KEY POINTS .............................................................................................................. 113

CHAPTER SEVEN: CODE OF ETHICS 7-1 CODES IN HISTORY ............................................................................................................................. 119 7-2 CODES OF ETHICS AND CODES OF PROFESSIONAL CONDUCT AND STANDARDS ..................................... 120 7-3 CODE OF ETHICS AND PROFESSIONAL STANDARDS: COMMON LINKS ................................................... 122 7-4 AN INTRODUCTION TO OUR CODES .................................................................................................... 124 7-5 ETHICS AND THE DISCIPLINARY PROCESS ............................................................................................ 127 7-6 BOARD OF DIRECTORS: ETHICS, ACCOUNTABILITY AND RESPONSIBILITY .............................................. 130

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7-7 IN-CLASS ASSIGNMENT #1 – BOARD OF DIRECTORS AND MEMBER DISCIPLINE ..................................... 132 7-8 CONCLUSION – KEY POINTS ................................................................................................................ 133

CHAPTER EIGHT: PROFESSIONAL STANDARDS AND CODES OF ETHICS 8-1 PROFESSIONAL STANDARDS AND CODES OF ETHICS ............................................................................ 139 8-2 PROFESSIONAL STANDARDS HANDBOOK ............................................................................................ 144 8-3 FIDUCIARY DUTY AND RESPONSIBILITY ............................................................................................... 145 8-4 THE PILLARS OF AGENCY AND DUTIES TO THIRD PARTIES..................................................................... 147 8-5 RELATIONS WITH YOUR INSTITUTE, CHAPTERS AND BOARDS ............................................................... 150 8-6 RELATIONS WITH YOUR FELLOW MEMBERS ........................................................................................ 151 8-7 PROFESSIONAL COURTESY .................................................................................................................. 152 8-8 AVOIDING CONTROVERSY AND COMPLAINTS...................................................................................... 153 8-9 CONCLUSION – KEY POINTS ................................................................................................................ 156

CHAPTER NINE: REIC CODES OF ETHICS & CODES OF PROFESSIONAL CONDUCT AND STANDARDS 9-1 ABOUT THE REAL ESTATE INSTITUTE OF CANADA ................................................................................ 161 9-2 THE CODE OF PROFESSIONAL STANDARDS OF REIC .............................................................................. 162 9-3 KEY PRINCIPLES OF THE REIC CODE OF PROFESSIONAL STANDARDS ..................................................... 162 9-4 REIC PROFESSIONAL DESIGNATIONS ................................................................................................... 167 9-5 IN-CLASS ASSIGNMENT #1 .................................................................................................................. 168 9-6 CONCLUSION – KEY POINTS ............................................................................................................... 169

CHAPTER TEN: THE INSTITUTE OF REAL ESTATE MANAGEMENT CODE OF ETHICS & CODES OF PROFESSIONAL CONDUCT AND STANDARDS 10-1 IREM - CODE OF PROFESSIONAL STANDARDS .................................................................................... 174 10-2 CODE OF PROFESSIONAL ETHICS ....................................................................................................... 178 10-3 CONCLUSION – KEY POINTS .............................................................................................................. 190

CHAPTER ELEVEN: THE CANADIAN REAL ESTATE ASSOCIATION (CREA) CODE OF ETHICS & CODES OF PROFESSIONAL CONDUCT AND STANDARDS 11-1 THE CANADIAN REAL ESTATE ASSOCIATION (CREA) ........................................................................... 196 11-2 CONCLUSION – KEY POINTS ............................................................................................................. 199

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CHAPTER TWELVE: CONCLUSION 12-1 WHY GOOD ETHICS = GOOD BUSINESS .............................................................................................. 204 12-2 SOLID ETHICS REPLACE EXCUSES ....................................................................................................... 204 12-3 THE PURSUIT OF EXCELLENCE DEPENDS UPON SOLID ETHICS ............................................................. 206 12-4 UNDER ALL IS THE LAND… REAL ESTATE AND ETHICS ......................................................................... 207 12-5 IN-CLASS ASSIGNMENT #1 - YOUR PERSONAL ASSESSMENT ............................................................... 208 12-6 IN-CLASS ASSIGNMENT #2 – MY PERSONAL CODE OF ETHICS ............................................................. 211 12-7 CONCLUSION – KEY POINTS .............................................................................................................. 212 12-8 CONCLUSION ................................................................................................................................... 213

APPENDIX A: CASE STUDY – THINKING ETHICALLY/THE CASE OF MARIA ELENA APPENDIX B: CASE STUDY – THE PARABLE OF THE SADHU APPENDIX C: CASE STUDY - THE TYLENOL CRISIS CASE STUDY APPENDIX D: CASE STUDY - MCMILLAN VS TRAYNOR PART I APPENDIX E: CASE STUDY – UP AGAINST WALMART APPENDIX F: CREA CODE OF ETHICS AND STANDARDS APPENDIX G: WHAT WAS VOLKSWAGEN THINKING

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REIC 2600

CHAPTER ONE

GOALS AND OBJECTIVES: Chapter one will provide an introduction to the course material and the major themes that will be explored. The instructor will provide some of his/her background information while identifying what is to be expected throughout the course.

REIC 2600 Ethics and Business Practice

INTRODUCTION TO ETHICS AND BUSINESS PRACTICE

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CHAPTER ONE – TABLE OF CONTENTS INTRODUCTION TO ETHICS AND BUSINESS PRACTICE

1-1 INTRODUCTION TO THE COURSE .............................................................................................................. 5 1-2 ABOUT THE COURSE AUTHOR................................................................................................................... 6 1-3 COURSE OBJECTIVES ................................................................................................................................ 7 1-4 PERSONAL OBJECTIVES ............................................................................................................................ 7 1-5 IN-CLASS ASSIGNMENT #1: THE DRUG TEST ............................................................................................... 8 1-6 IN-CLASS ASSIGNMENT #2: THE CONFIDENTIALITY SURVEY ......................................................................... 8 1-7 CHART - REAL ESTATE PROFESSIONALISM .................................................................................................. 9

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REIC 2600 Ethics and Business Practice

1-1 INTRODUCTION TO THE COURSE Since 1955, the Real Estate Institute of Canada has been the national leader in promoting excellence in education programs and professional designations for the committed real estate specialist. This course introduces the student to the study and application of ethics for both their personal and business lives. The course consists of three days of lectures, video presentations, and in-class discussions. The students are expected to actively participate in all group discussions, and participate and complete individual and group in-class assignments. During the course, the students will be introduced to the past 4,000 years of ethical theory and historic tradition as with regards to morals, reasoning, ethics and decision making, and why knowledge of these subjects is relevant to today’s ethics and business practices. Following this review of ethics theory and historical tradition, the students will be introduced to how and why we make decisions, and how we can more effectively rationalize our decision-making process and style. We will also explore those internal and external factors which drive human nature and in particular how we reason and make our decisions. The Codes of Ethics and Professional Standards will also be discussed in detail. The students will be presented with the Codes of the Real Estate Institute of Canada, the Institute of Real Estate Management and the Canadian Real Estate Association. These Codes dictate how the real estate professional must govern them and what their fellow members, their clients and the public expect of them. The students will also view and discuss the Institute of Real Estate Management video on ethics, which includes a disciplinary hearing between members. Throughout the course, landmark case studies on business and ethics will be presented and reviewed. Current and topical matters and news will also be explored. Students are welcome to provide and present their own relevant experiences when requested. Their interaction with the class will increase the learning experience. On the final day of the course, students will write a two-hour open-book exam which is based upon ethics, theory and history, applied ethics, and the Codes of Ethics and Professional Standards. This course will confirm that good ethics is good business.

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1-2 ABOUT THE COURSE AUTHOR WILLIAM P.J. McCARTHY, A.A., B.A., B.G.S., M.A., B.Th., M.A., MAIS CPM, FRI, CLO, RPA, FRICS, R.I., ICD.C, Q.Arb., CCIM, CRE

William McCarthy is the author of this REIC course textbook. Mr. McCarthy who is a faculty member of the Real Estate Institute of Canada is also the author of two other REIC textbooks, REIC 2360 – The Leasing Process and REIC 2361 – Negotiation and Documentation in Commercial Leasing. Mr. McCarthy is a property manager, developer, real estate agent and consultant. His firm, W.P.J. McCarthy and Company Ltd., is an Accredited Management Organization (AMO). In addition to his own real estate portfolio, Mr. McCarthy provides real estate consulting services on a selected basis for third parties. Mr. McCarthy served as the President of the Real Estate Institute of Canada (2009 – 2010) and has served as the President of the REIC/IREM B.C. Chapter. Mr. McCarthy currently serves on the Institute of Real Estate Management’s Ethics and Disciplinary Hearing Committees. He is currently the ViceChairman of the Counselors of Real Estate Ethics Committee. Among Mr. McCarthy’s real estate awards and honours include the Morguard Literary Award and being awarded the J. Patrick Harvey award for “his significant contribution to real estate education in Canada”.

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1-3 COURSE OBJECTIVES THE OBJECTIVES OF THIS COURSE ARE TO: ✓ Provide the students with an overview of the major ethics theories and traditions. ✓ Increase awareness of how frequently we are faced with ethical decisions and create an understanding of how this shapes our careers and our profession. ✓ Present practical and effective methods for ethical decision-making. ✓ Provide a clear understanding of the content, value and application of the professional codes and why they play an integral part in business success. ✓ Complete a requirement for a Real Estate Institute of Canada, and/or Institute of Real Estate Management designation and/or certification. ✓ Encourage ongoing personal professional development.

1-4 PERSONAL OBJECTIVES WHAT ARE YOUR OBJECTIVES? In order, rank the following questions from 1 to 5 (1 being the most important). What are your reasons for taking this course? 1. To know the theory and history of ethics

____________

2. My employer requires it

____________

3. To complete a program of study/certification

____________

4. The subject interests me

____________

5. I am concerned with the ethical standards in my profession

____________

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1-5 IN-CLASS ASSIGNMENT #1: THE DRUG TEST

IS IT ALRIGHT FOR COMPANIES TO REQUIRE A DRUG TEST AS A CONDITION OF EMPLOYMENT?

YES

NO

1-6 IN-CLASS ASSIGNMENT #2: THE CONFIDENTIALITY SURVEY CONFIDENTIALITY SURVEY 1.

Have you ever made personal or non-job-related use of these items in your office? YES / NO _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____

2.

_____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____

PEN / PENCIL, ETC. PAPER/ENVELOPE/STATIONERY, ETC. PHOTOCOPY MACHINE TELEPHONE FAX MACHINE COMPUTER/TYPEWRITER E-MAIL POSTAGE OR COURIER AUTOMOBILE OTHER EMPLOYEES TIME AIR MILES / CORPORATE CREDITS

Have you every exaggerated, even slightly, on an expense claim form? Yes _____

3.

No _____

Have you ever invoiced/charged for work not yet completed? Yes _____

4.

No _____

If a co-worker engages in any of these unauthorized activities, would you report them? Yes _____ 8

No _____ REIC 2600 Ethics and Business Practice

1-7 CHART - REAL ESTATE PROFESSIONALISM

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REIC 2600

CHAPTER TWO

GOALS AND OBJECTIVES: chapter two will attempt to define ethics and how ethical practices apply to the real estate industry. Key concepts that will be addressed include: professional conduct and standards, honesty and ethical ratings, and how ethics intertwines with professionalism.

REIC 2600 Ethics and Business Practice

REAL ESTATE AND ETHICS

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CHAPTER TWO – TABLE OF CONTENTS REAL ESTATE AND ETHICS 2-1 WHAT ARE ETHICS? ...................................................................................................................15 2-2 THREE IMPORTANT ETHICAL QUESTIONS: ...................................................................................16 2-3 CONCEPTS ASSOCIATED WITH ETHICS .........................................................................................17 2-4 THE ETHICS PYRAMID ................................................................................................................19 2-5 WHY DO WE STUDY ETHICS? ......................................................................................................20 2-6 THE REAL ESTATE PROFESSIONAL’S COMMITMENT TO ETHICS .....................................................21 2-7 WHY ARE ETHICS SO IMPORTANT IN THE REAL ESTATE PROFESSION? ...........................................22 2-8 FIVE CORE VALUES BASED UPON THE WORD TRUST ....................................................................23 2-9 ETHICS AND PROFESSIONAL CONDUCT .......................................................................................24 2-10 ETHICS AND PROFESSIONAL STANDARDS ..................................................................................25 2-11 THE REAL ESTATE INSTITUTE OF CANADA: ETHICS ......................................................................26 2-12 MAJOR LINKS: ETHICS AND LAW ...............................................................................................28 2-13 ETHICS AND PROFESSIONALISM ...............................................................................................29 2-14 THE TWO COMPONENTS OF SUCCESS .......................................................................................30 2-15 HONESTY AND ETHICAL RATINGS –SECTION ONE .......................................................................31 2-16 HONESTY AND ETHICAL RATINGS .............................................................................................32 2-17 HONESTY AND ETHICAL RATINGS – SECTION TWO .....................................................................33 2-18 CONCLUSION – KEY POINTS .....................................................................................................34

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REIC 2600 Ethics and Business Practice

2-1 WHAT ARE ETHICS? The Real Estate Institute of Canada’s definition of Ethics: “Guidelines or rules by which we aim to live”. Another definition of Ethics is the difference between what we have the right to do (legal) and the right thing to do (ethical). Ethics refers to standards of conduct, standards that specify how one should act based on moral duties and virtues which themselves are derived from principles of right and wrong. There are two components to Ethics: The first involves the ability to recognize right from wrong and good from bad. The second involves the commitment to do what is right, good and appropriate. Therefore, Ethics and good ethical behaviour and action require both a commitment and action. The study of Ethics is as old as recorded time. Every generation faces both the same challenges that have always been present, but also, events, attitudes and circumstances that are unique to the times and their situation.

The above definitions are from the 2004 Edition of the Concise Oxford English Dictionary. While ethics can be defined and taught, it is up to the individual to determine how ethical they are in their day-to-day lives and business practices.

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2-2 THREE IMPORTANT ETHICAL QUESTIONS: FIGURE 2-1: FUNDAMENTAL ETHICAL QUESTIONS

WHAT ARE ETHICS? •Guidelines or rules of conduct or, •A set of moral principles or values to guide behaviour

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WHAT BETTER DEFINES ETHICS?

CAN YOU LEARN ETHICS?

•What we have a RIGHT to do, vs. •The right THING to do

•Are they an inherent part of YOUR personality and/or character?

REIC 2600 Ethics and Business Practice

2-3 CONCEPTS ASSOCIATED WITH ETHICS We have learned that the word ethics has at its root the Greek word for “habit”, or “character”. Good ethics, therefore, refer to good habits and good character. As societies have evolved, there has been an ongoing quest for both knowledge and stability. Successful and enduring societies must develop a sense of what comprises a good and virtuous way of living and how one conducts their affairs. Society also endeavors to establish rules, laws, values and principles that set perimeters on how we can act, as well as how we should behave. They guide our own actions, as well as our behaviour and dealings with others. The very existence and continuation of a sustainable society is dependent on such structures, and most critically, productive and ethical people. The following six words define the overall concept of an ethical society. The following six words and what they define are integrated with the study and pursuit of ethics. ETHICS:

Good habits and solid character. Ethics = Excellence

VALUES:

These are the acts, customs and traits that individuals and organizations believe in and try to adhere to. Values are what matters to people who think and care.

MORALS:

A set of rules and guides to conduct upon which societies are established and how they function. They reflect and pertain to society’s current ideas of right and wrong, and acceptable or unacceptable behaviour and actions.

INTEGRITY:

Defines how one acts and honors their commitments to both society and others. Integrity is also tied to the consistency of thought and actions and how one acts towards and deals with others.

CHARACTER:

Character is comprised of one’s values, principles, personal ethics and how an individual is perceived by themselves and by others.

LAWS:

These are a series of rules and regulations, which in a free society, are discussed, debated and approved. Laws are written to express the needs of people. They define and outline both acceptable and unacceptable behaviour in society. Laws also state penalties and punishment for breaches of these rules and regulations.

These six words and concepts are inter-connected. When we study ethics, we also study character, integrity, laws, morals and values. The conscientious and professional individual and organization will commit to having the prefix “good” placed in front of each of these six words when they are applied to them or that institution which they belong to.

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REIC 2600 Ethics and Business Practice

2-4 THE ETHICS PYRAMID An individual’s ethics are built upon personal values, results, and how we respond to and respect the laws, codes, rules and principles that govern our lives within society and within the profession they have chosen.

FIGURE 2-2: AN INDIVIDUAL’S ETHICS

PERSONAL VALUES What you feel

RESULTS Consequences & impact on those affected

CARVED IN STONE Laws, Codes, Rules & Principles

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2-5 WHY DO WE STUDY ETHICS? The complexity of the modern real estate industry combined with expanded legal responsibility of real estate licensees make the study of professional ethics essential to maintaining a high standard of conduct in the industry, and to promoting the good reputation of real estate professionals in the public opinion. Simply stated, the wide variety of responsibilities undertaken by real estate licensees involves differing duties and the constant risk of conflicts of interest and other ethical problems. A good knowledge of the ethical code that governs a professional’s conduct is essential for anyone employed or otherwise active in the real estate industry.

The above is extracted from the Province of British Columbia’s Real Estate Trading Service’s Licensing Course Manual. (In Canada, the provinces are responsible for their respective Real Estate Acts, and the Licensing and administration of the real estate profession). This statement succinctly sums up the responsibilities you will engage in when you present yourself as a real estate professional. The general public and your clients depend on you. This dependence may also lead to trust, and then the engagement of your services. They seek out your expertise and skill because: ✓ In the scope and scale of business transactions most people undertake in their lives, real estate tops the list. The real estate professional is very often involved in the most important financial decision(s) the client will be involved in. Their future may partially rest in your hands. ✓ Real estate often equates to basic shelter considerations and lifestyle decisions. A person, and/or their family‘s basic human needs can be satisfied, or not, based upon your actions. ✓ Real estate involves trust and emotions. The professional understands this and acts accordingly. ✓ The economic viability of a community and indeed a nation are extremely dependent on a stable and well-functioning real estate industry. (“Under all is the land …”). ✓ You have been deemed to be a professional, and this is how you are presented to your clients and society. You therefore must act in accordance with these responsibilities as you will be held accountable for your words and actions. ✓ Good ethics are simply good business. 20

REIC 2600 Ethics and Business Practice

2-6 THE REAL ESTATE PROFESSIONAL’S COMMITMENT TO ETHICS “Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. Through the REALTOR®, the land resource of the nation reaches its highest use and private land ownership its widest distribution. The REALTOR® is instrumental in molding the form of his or her community and the living and working conditions of its people. Such functions impose grave social responsibilities which REALTORS® can meet only by diligent preparation and considering it a civic duty to dedicate themselves to the fulfillment of a REALTOR®’s obligations to society”. - From the preamble to the REALTOR® Code of Ethics

The above words begin the preamble to the REALTOR® Code of Ethics. This is an extremely powerful, and bold statement, these words are meant to convey to both the real estate professional, and the society in which they reside and work, that they are committed to excellence. The first REALTOR® Code of Ethics was first approved in 1913. Therefore, there is a rich history and tradition, one founded on: ➢ ➢ ➢ ➢ ➢ ➢

Solid ethics Professional and competent service Knowledge, skill and expertise in their chosen field Absolute honesty and integrity in all business dealings Cooperation and fairness to all parties and fellow members A commitment to personal accountability and responsibility based upon acceptance of, and compliance with their respective Code of Ethics and Standards of Business Practice.

All of the professional associations we will study in this course, the Real Estate Institute of Canada (REIC), the Institute of Real Estate Management (IREM), and the Canadian Real Estate Association (CREA) have similar Codes of Ethics and Professional Standards. This is also the case with any professional association that presents itself as a leader in their field. It is this commitment to such standards and ethics, which separates the true professional from the unqualified.

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2-7 WHY ARE ETHICS SO IMPORTANT IN THE REAL ESTATE PROFESSION? Knowledge of and the practice of good ethics is a cornerstone of a free and democratic society. A decline in ethics equals a decline in society as a whole. Our businesses depend on good ethical behaviour by those engaged in commerce. We will study in this course some notable failures in ethics and their consequences. Thankfully, most people who are entrusted with authority and responsibility in business exercise this trust with care and attention. Those who are engaged in the real estate industry have the increased burden and responsibility of assisting their clients with some of the most important decisions they will have to make in their lives. Whether it is purchasing or selling a residence, acquiring land or a leasehold interest, or developing or financing a project or property, the real estate professional has been engaged to provide expertise, knowledge and skill, and a precise level of service. The consumer has the right to expect the highest standard in excellence and ethics. As the preamble to the Canadian Real Estate Association’s REALTOR® Code states, “under all is the land”. No professional should be able to read this preamble without both a sense of pride in their profession, as well as a deep sense of responsibility. Consider the following: ❖ Your skill, service and advice can literally make or break your client financially. ❖ Your clients will depend on you to help make their goals a reality, and quite possibly (no exaggeration), their dream come true. ❖ Your clients will invest their trust, emotions, resources and future with you. ❖ Your clients will cede some or all of their decision making to you. They will ask you “what would you do/recommend?” ❖ Your clients will trust you with personal and confidential information. ❖ Your client has selected you over others.

. . . How will you respond to their trust and confidence in you?

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2-8 FIVE CORE VALUES BASED UPON THE WORD TRUST Trust is at the center of all personal and business relationships. It is the single most important ingredient to success and respect. Without trust, you cannot expect either a sound personal relationship or success in your business dealings. To receive trust, one must be worthy of trust. You gain trust through integrity, sound moral principles, and solid ethics. Trust is the integral component of your character and by extension your reputation. Once trust is gained it is a powerful asset in everything you will do. If you lose your trustworthiness, you may never recover it, or certainly not in its entirety. There are five core values that are based upon trust. These are: 1.

Responsibility We are responsible for our attitude, our knowledge and our skills and, therefore, our level of success. We accept all our responsibilities to our clients, our colleagues and our family. As professionals, it is our responsibility to care about our clients and respect the trust they give us by choosing us as their agents.

2.

Understanding It is important to listen and communicate with clients. We understand the system and the duty of our role. We understand that true business success comes from caring about others.

3.

Standards We believe in standards of excellence in all that we do. We believe it is hypocritical to show one face in public and another in private, especially if our clients would not approve of our private face. Our minimum standard is to win every client for life – to win more than a satisfied client, to win a loyal client. We measure our success by two standards – client loyalty and profit. We believe that both these standards are dependent on each other. Few businesses are as trust-based and centered as real estate.

4.

Truth We believe in being truthful with ourselves and with others. We do not believe in misleading or deceptive conduct, no matter what the reason. We would rather lose business than use any method that relied on lies or deceit of any kind.

5.

Honesty We believe honesty is the only way to succeed in business – in the long term. We are here for the long term. Being open and truthful in business is so rare that it creates a huge impression. We believe in making the right impression. We believe in the truth. We believe it is wrong to deny our mistakes or cover them up with halftruths or excuses. We admit our mistakes and face the consequences. (About Us-Approved Core Values – Jenman, Ethics in Real Estate)

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2-9 ETHICS AND PROFESSIONAL CONDUCT Morals, ethics and professional standards are linked. They also have their own specific meanings and applications. MORALS: Are the beliefs held by an individual and founded on their fundamental principles of right and wrong. Morals are formed from generally accepted customs and the individual’s beliefs. Morals are generally religiously or culturally passed from generation to generation. ETHICS: The standards of conduct adopted and practiced within a culture or society; rules of behaviour established, periodically modified, and accepted by business to provide fair, honest, proper and moral practice. Ethics consists of a voluntary set of rules and guiding principles that individuals adopt as a moral code of conduct. Business and real estate ethics refers to accepted standards of conduct within that business culture or society. PROFESSIONAL STANDARDS: The rules and regulations, more precise than ethical rules, governing the day-to-day activities of persons who adopt such standards. In organized real estate, professional standards and codes are stated in our ethics. PROFESSIONAL CONDUCT: The activities and actions exemplifying rules and regulations set out in the codes and professional standards you will pledge yourself to. When you enter into a profession, especially one as important and regulated as real estate, you voluntarily acknowledge and accept that your personal and professional ethics and morals must be beyond reproach. Furthermore, you will be bound by and must adhere to those Code of Ethics and Professional Standards that you accept with membership in your professional organization.

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2-10 ETHICS AND PROFESSIONAL STANDARDS The content and productive person will voluntarily strive for, and accept that good ethics is a desired personal and societal goal. A just and orderly world and economy require a foundation based upon solid ethics; fair and reasonable laws; and fairness and justice for all. To perpetuate this, and to ensure that all members have the instructions, examples and guidelines to conduct their business affairs, professional associations, such as the Real Estate Institute of Canada; the Institute of Real Estate Management and the Canadian Real Estate Association all have both Codes of Ethics coupled with Professional Standards. These words are the respective organization’s declaration of purpose and action. They are meant to both promote the skills and quality of the member, and to provide assurance and comfort to those who engage the real estate professional, and the public at large. These three organizations’ Code of Ethics and Professional Standards will be reviewed in this course and are profiled in this text. All are similar and specific. The following is from the Real Estate Institute of Canada’s Professional Standard’s Handbook and is reflective of what these standards are meant to achieve and represent. V. THE IMPORTANCE OF ETHICS AND PROFESSIONAL STANDARDS One of the most basic defining features of professionals is that they act in such a way that personal gain is never placed above the interest or good of the public. In the simplest terms, ethics is nothing more than proper behaviour. High ethical standards, however, demand that individuals look beyond self or corporate interest to the interests of others and the society as a whole, not just the avoidance of harm. Integrity, prudence, competence and cooperation are the cornerstones, with full disclosure (of personal interests and limitations on competence) as the most important way in which Members have undertaken to ensure a “level playing field” with informed participants. Ethics are crucial to a healthy and productive society. They rest on the concept of a shared interest—that we all have a stake and a collective responsibility in establishing a fair and equitable social system. Whenever a position is favoured without regard for the ramifications on society, or self-interest in business overshadows the needs and rights of others, the social contract is violated.

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2-11 THE REAL ESTATE INSTITUTE OF CANADA: ETHICS “Guidelines or rules by which we aim to live” Their Code of Professional Standards lists 17 articles that outline the knowledge, skill, ethics, and service its members are expected to provide their clients and the public. The REIC Code, which shares a similarity with other professional real estate associations, incorporates the following articles: Article I Article 2 Article 3 Article 4 Article 5 Article 6 Article 7 Article 8 Article 9 Article 10 Article 11 Article 12 Article 13 Article 14 Article 15 Article 16 Article 17

Quality of Service Well Informed and Knowledgeable Full Disclosure to Client Care of Property Fairness to all Parties Referral When Lacking Competence Representing Divergent Interests Conflict of Interest between Client and Member Disclosure of Fees Fair and Reasonable Fees Confidential Information Outside Interests Advertising Use of Designations Other Institute Members Laws and the Conduct of Business Member Co-operation in Enforcing the Code

The foundation of each of these Articles is the expectation of solid ethical behaviour and standards. The REIC and other Codes are the public’s assurance of quality and the highest ethical behaviour by the member. These Codes are also the guideline by which the member practices their chosen profession. There can be no “grey areas” on any matter. Professional codes are linked with laws and other rules and regulations. The real estate professional must know each of these components. The following shows how much information the real estate professional must know and understand about their business practices and the law. Always remember, that as a real estate professional, you will be bound not only by your professional Code of Ethics and Standards, but by any and all applicable laws which govern not only citizens and businesses within our society, but those which are specifically applicable to real estate activity and transactions. When studying your Code of Ethics and Practice Standards, keep in mind that these Codes highlight the very activities and actions that you must focus most of your attention on and your compliance with. Your Codes have been refined over time to ensure that there are no “grey areas” in your professional conduct. 26

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The words of these Codes and Professional Standards and how each one has been drafted and refined have a purpose behind it. The following chart shows the interaction between the law, the Code(s), and the personal values of the committed professional. Rather than being a burden, these responsibilities represent your expertise and ethics. Therefore, the real estate professional is deemed to be an expert and true professional in the execution of their professional duties and responsibilities. As such, the real estate professional must always exercise their agency with skill and diligence. Ethical behaviour is expected. This also applies to the concept of Duty of Care. Consider the following definition of duty of care. “If in the normal course of business, a person seeks information or advice from another who possesses special skills, in circumstances in which a reasonable person so asked would know that her skill or judgment was being relied upon, the person being relied upon is under a duty to take reasonable care in giving the information sought. The skilled person can escape liability only if she makes it clear that she accepts no responsibility for the accuracy of information.”

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2-12 MAJOR LINKS: ETHICS AND LAW The real estate professional is bound by ethical, statutory and Institution and Association standards, laws, rules and regulations. There is no avoidance of these conditions or the responsibility and accountability they impose upon you. You have entered a profession that binds you to both of these standards. This is a voluntary choice you have made. Furthermore, you have made a commitment to your professional colleagues, your clients, the public, and above all yourself to think through and execute your decisions and actions to the highest level possible. You are now committed to quality service, behaviour and excellence.

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2-13 ETHICS AND PROFESSIONALISM Having considered the preamble to the REALTOR® Code, and the REIC definition of ethics being “Guidelines or rules by which we aim to live”, the true real estate professional will know that: ❖ Ethical behaviour is behaviour that conforms to guidelines and rules. ❖ The first step of ethical decision-making is to check the rules/laws/guidelines, if any, on a particular issue. In this course, you will review the Codes of Ethics and Professional Standards for the Real Estate Institute of Canada, the Institute of Real Estate Management and the Canadian Real Estate Association. These Codes together with supporting materials provided by various real estate associations, training and educational seminars, and personal and corporate professional development leave no opportunity for someone who works in the real estate industry not to know what is expected of them. (For example, within this text is the outline of the Real Estate Council of British Columbia License Practice Manual. This excellent publication is provided to all Licensees in the province. All provinces have similar publications. When you review the Table of Contents of this manual, there is absolutely no excuse for a licensed member not to know their trade practices or what they can or cannot do). The courts have also reaffirmed this many times over. The real estate practitioner is deemed the expert and as such has the highest level and duty of care to their clients and the public. Just like any other legislative profession, the real estate professional will not have any excuse for incompetence or unethical behaviour. The following court case sums up the judicial system's attitude with regard to the duty of care entrusted to and expected of real estate professionals.

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2-14 THE TWO COMPONENTS OF SUCCESS The following shows the interconnection of expertise and reputation and how these two components create success in your profession. Carefully reflect on each of the four components associated with what you know about your job, and how you do your job.

Knowledge truly is power. The more knowledge you acquire and expertise in your profession the more you are empowered and the more confident you will be in the delivery of your services. Your clients will also sense and appreciate this. When coupled with a reputation that is centered on credibility, respect and trust, the performance and execution of your job are highlighted by excellence. How you do your job is defined by your personal ethics, character, and reputation. Both of the two components of success can be continually developed, refined and enhanced. The true professional willingly does so, as they are committed to excellence.

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2-15 HONESTY AND ETHICAL RATINGS –SECTION ONE CLASS ACTIVITY: HONESTY AND ETHICAL RATINGS #1 The following are twenty professions. Rank these in accordance with your own belief on how ethical each profession is… RANKING (1 = Most Ethical & 20 = Least Ethical) Accountant

_____

Advertising Practitioner

_____

Bankers

_____

Building Contractors

_____

Business Executives

_____

Car Salespeople

_____

Clergy

_____

Druggists, Pharmacists

_____

Funeral Directors

_____

High School Teachers

_____

Journalists

_____

Labor Union Leaders

_____

Lawyers

_____

Lobbyists

_____

Medical Doctors

_____

Members of Congress

_____

Nurses

_____

Police Officers

_____

REALTORS®

_____

Stockbrokers

_____

Telemarketers

_____

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2-16 HONESTY AND ETHICAL RATINGS 2011 SURVEY The following list is from a 2008 annual Gallup survey (U.S.A.) of occupations rated for their honesty and ethical standards.

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NOTE: Other applicable rankings and surveys may be presented.

2-17 HONESTY AND ETHICAL RATINGS – SECTION TWO CLASS ACTIVITY: HONESTY AND ETHICAL RATINGS #2 The following are ten real estate related professions. Rank these in accordance with your own belief on how ethical each profession is… RANKING (1 = Most Ethical & 10 = Least Ethical) Building Contractors

_____

Commercial Leasing Agents

_____

Commercial Property Managers

_____

Environmental Consultants

_____

Insurance Underwriters

_____

Mortgage Brokers

_____

Real Estate Appraisers

_____

Real Estate Developers

_____

Residential Property Managers

_____

Residential Salespeople

_____

Why have you ranked these professions in the order you have in these two in-class assignments? Have you based your decisions on personal observations or experiences, or perhaps current perception? What are the consequences of such rankings for the real estate profession? Should you/we be concerned? ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ REIC 2600 Ethics and Business Practice

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______________________________________________________________________________

2-18 CONCLUSION – KEY POINTS 1.

The preamble to the REALTOR® Code of Ethics succinctly, boldly, and proudly states the importance of real estate in our society and the importance of having an ethical and highly skilled group of professionals involved in this field.

2.

The study of ethics is as old as recorded history. Ethics defines excellence, values, character and ultimately your personal and professional level of success.

3.

Due to the size and scope of real estate transactions on individuals and businesses, it is essential that the real estate professional is equal to the task at hand.

4.

Solid ethics equates to good business and will build the trust necessary for a wellfunctioning real estate industry.

5.

Trust is a core value. Successful and professional real estate practices are based upon trust. If you are professional and earn one’s trust, you will succeed.

6.

The Real Estate Institute of Canada defines ethics as guidelines or rules by which we aim to live”.

7.

Real estate practitioners are deemed to be professionals and will be held to the highest standards. As professionals, we must be aware of the links between ethics, law, and rules/regulations.

8.

The professional must know their Codes of Ethics and Standards, and must exactingly and willingly follow them.

9.

The two components of success are What You Know About Your Job and How You Do Your Job.

10.

Ethics and honesty are intertwined. How the public perceives our profession and our practitioners does matter – greatly.

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REIC 2600

CHAPTER THREE

GOALS AND OBJECTIVES: Chapter three will explore the history of ethics and the individuals that have influenced this topic. This chapter will highlight the four ethical quests and the ten values that ethical societies tend to promote.

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AN INTRODUCTION TO ETHICS

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CHAPTER THREE – TABLE OF CONTENTS AN INTRODUCTION TO ETHICS 3-1 INTRODUCTION ........................................................................................................................39 3-2 THE MAJOR ETHICAL THEORIES AND HISTORICAL TRADITIONS .....................................................40 3-3 ARISTOTLE - GREEK PHILOSOPHER [384 – 322 BCE] ......................................................................41 3-4 ST AUGUSTINE OF HIPPO - GREEK PHILOSOPHER [354 – 430 A.D.] ................................................42 3-5 JOHN STUART MILL – BRITISH PHILOSOPHER/ECONOMIST [1806-1873] ........................................43 3-6 IMMANUEL KANT – GERMAN PHILOSOPHER [1724 -1804] ...........................................................44 3-7 THE FOUR ETHICAL QUESTS .......................................................................................................45 3-8 THE FIRST QUEST: ETHICS = EXCELLENCE .....................................................................................45 3-9 THE SECOND QUEST: ETHICS INCORPORATE MORAL LAW ............................................................46 3-10 THE THIRD QUEST: ETHICS EMBODY AN ELEMENT OF HOLINESS .................................................47 3-11 THE FOURTH QUEST: GOOD ETHICS LEADS TO HAPPINESS .........................................................51 3-12 THE THREE IMPERATIVES FOR HUMAN CONDUCT .....................................................................52 3-13 TEN VALUES WHICH DISTINGUISH CULTURES THAT FOSTER ETHICAL GROWTH ............................53 3-14 ETHICAL ROLE MODELS: IN-CLASS ASSIGNMENT ........................................................................54 3-15 CONCLUSION – KEY POINTS .....................................................................................................55

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3-1 INTRODUCTION The concept and study of ethics is as old as recorded history. From the time the ancient Greeks first began this branch of philosophy, and moral behaviour, we have endeavoured to both define, and then implement standards of behaviour and action, which reflect solid character and virtue. The word ethics is derived from the Greek word “Ethike”, which translates as Ethos = Habit/character. The Greeks rightfully believed that good character and good habits were the best safeguards to establish a well-functioning and orderly society and the best assurance of a self-perpetuating nation-state. Ethics, or moral philosophy, is a multi-disciplined subject with distinct branches of study, such as real estate and business ethics and applied ethics. All involve key concepts such as good and bad, right from wrong, and how and why we act as we do – and how to elevate our behaviour, decision-making and judgment. For this course, the main point is this: The concepts associated with Ethics and good ethical behaviour are timeless. While theories may evolve, the foundations of what constitutes good ethics and ethical behaviour remain constant and are to be aspired to.

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3-2 THE MAJOR ETHICAL THEORIES AND HISTORICAL TRADITIONS The study of ethics and ethical behaviour has been going on since recorded history. The human quest for knowledge and the ability to answer the central questions of our existence are profound. Where did I come from? Why am I here? Where am I going? How should I act? Why do I act? What is right? What is wrong? What is just and what is not? These are the questions that philosophers, theorists, and prophets have attempted to answer. Philosophy is the study of the fundamental nature of knowledge, reality, and existence. The following are the four major ethical theories and historical traditions.

FIGURE 3-1: FOUR MAJOR ETHICAL THEORIES

CONSEQUENTIALIST •1. GREEKS - “Excellence” - Cultivation of virtue and character Example - Plato’s Dialogues, Socrates, Aristotle •2. UTILITARIANISM - Greatest happiness of the greatest number Example – John Stuart Mill, Jeremy Bentham

NON-CONSEQUENTIALIST •1. BIBLE, KORAN, TORAH - Love God & Neighbour - Obey God’s Laws Example - St. Augustine, St. Thomas •2. MORAL LAW - Fundamental principles necessary to the ‘reasonable order’ for/intrinsic of a good and just society Example – Kant, Hobbes, Locke, John Rawls

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3-3 ARISTOTLE - GREEK PHILOSOPHER [384 – 322 BCE]

“… What is the highest goal to which a human should aspire? … The end for which all means are chosen … happiness”

Aristotle was the most famous student of the Greek educational program created by Plato. Having spent 20 years of his life studying history, philosophy, sociology and moral issues, Aristotle would return to his native Macedonia where he became the teacher of alexander the great. Aristotle’s logical treatises, (known as the organon) were a systematic approach to develop a universal method of reasoning by means of which it would be possible to learn everything there is to know about reality. Aristotle would also devote much of his time and intellectual capacity in an attempt to explain how moral conduct contributes to the good life for humans. Aristotle and the Greeks believed there were three reasons why people might not be good or happy: misdirected selfinterest or ignorance; failure of the state or the family to provide a proper education; or rare perversity. The Greeks approach to ethics was an early form of consequentialism, which revolved around reviewing the ends (or results) as the ideals for which to strive. The Greeks sought excellence, and this, they believed could be achieved through a cultivation of virtue and character.

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3-4 ST. AUGUSTINE OF HIPPO – CATHOLIC PHILOSOPHER [354 – 430 CE]

“Find out how much God has given you and from it take what you need; The remainder is needed by others.” Throughout its history, the bible has remained the most popular and successful teacher of morality in the western world. While the Greeks saw the source of morality as within themselves and the goodness of an action in its results, adherents of the bible received their guidance and inspiration from outside themselves; from a righteous God whose teachings become their laws. St. Augustine of Hippo (in northern Africa) is not only a catholic saint but a doctor of the church. His autobiography confession (401) deals with his conversion to Christianity and his becoming a priest, bishop, and teacher. The Greek philosophers were the consequentialists. The bible would form the basis for the non-consequentialist historical traditions and ethical theories. Saints and scholars such as St. Augustine and St. Thomas Aquinas were the most outstanding proponents of these Christian teachings.

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3-5 JOHN STUART MILL – BRITISH ECONOMIST [1806-1873 CE]

“A person may cause evil to others not only by his actions but by his inaction, And in either case, he is justly accountable to them for the injury.”

Together with Jeremy Bentham, the Englishman, John Stuart mill is the foremost proponent of utilitarianism, the ethical theory that has as its hallmark the quest for the greatest happiness of the greatest number. Mill was a formidable intellectual, albeit one with a fragile personality. He read and wrote extensively on political theory, economics, and social issues of his day. As a proponent of utilitarianism, Mill advocated a belief system that argued “everyone ought to act so as to bring about the greatest possible balance of intrinsic good over intrinsic evil for everyone concerned”. Many consider utilitarianism the purest form of consequentialism, as the utilitarian’s judge exclusively on results. The appeal of utilitarianism is especially appealing to politicians as an ethical system because through this system they would see their only job being to promote the interests of the people who have elected them, and hence the phrase, the “end justifies the means”.

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3-6 IMMANUEL KANT – GERMAN PHILOSOPHER [1724 -1804 CE]

“So act that your principle of action might safely Be made a law for the whole world.”

Immanuel Kant was a German philosopher who championed along with Thomas Hobbes, John Locke, and John Rawls the theory of moral law. Their belief was that there is in some form a logical system of moral imperatives, (directives, principles or rules) inherent in the universe. Accordingly, much like the laws of physics, the moral law theorists believed that our minds are capable of understanding this system and obeying it. Like the biblical tradition, the moral law approach is non-consequentialist and follows laws and absolutes. However, these laws are believed to be derived from nature and the order of the universe, and not from god. They are to be discovered rather than conveyed in the teachings of a deity.

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3-7 THE FOUR ETHICAL QUESTS Collectively these four elements, Excellence, Moral Law, Holiness and Happiness, are known as the Four Quests. The Quest implied is the journey one takes throughout each stage of their life as they grow and develop into the very best person they can be and become. The four components of the Quest are based upon centuries of thought and are meant to focus one’s attention on what we need to reflect and act upon to be of good and ethical character. Throughout their life, the ethical person commits to this quest, with the goal of achieving them.

#1 EXCELLENCE

#2

#3

#4

MORAL LAW

HOLINESS

HAPPINESS

3-8 THE FIRST QUEST: ETHICS = EXCELLENCE The word ethics is derived from the Greek word “ETHIKE”. Ethike further translates as ETHOS = HABIT / CHARACTER The Greeks believed that if we had excellent and virtuous habits, so we would act. The Greeks were consequentialists, a term we will review when we study ethical theories. Consider the thoughts of two of the greatest Greek philosophers: Plato (428 – 348 BCE) “Whether or not the world recognizes and rewards virtue, the just person is the happiest of human beings”. Aristotle (384 – 322 BCE) “Virtue is a state of character concerned with choice”. The Greeks strove for excellence in their pursuits. However, they would learn that ethics is not a precise discipline in itself and one should not expect certainty in conclusions.

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3-9 THE SECOND QUEST: ETHICS INCORPORATE MORAL LAW Ethics and moral law are intertwined. The basic principles of Moral Law state that: 1. 2. 3.

There is a logical system of moral imperative inherent in the universe. Our minds are capable of understanding it. We are capable of obeying it.

Again we turn to the Greeks for a further explanation of the concept of moral law. The Greek historian, Herodotus (484 – 425 BC) wrote on the subject that: “Our perceptions of what is right vary from time to time, place to place and cult to cult. We all believe that there is one changeable law, knowable to everyone, open to human reason, written (perhaps) on the human heart. But when it comes down to the chapter and verse of that law, we simply do not agree on what it tells us to do.” Without the belief and acceptance of some degree of Moral Law operating in some form in our society and world, our social, economic and political systems simply could not function. Order requires that citizenry have a sense of and duty to the concept of Moral Law.

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3-10 THE THIRD QUEST: ETHICS EMBODY AN ELEMENT OF HOLINESS HOLINESS PART ONE: INTRODUCTION When we introduce religious concepts or history into this course, we are doing so because the history of Ethics has always had a religious component to it. This has especially been the case since the formation of Christianity. This section provides a historical perspective and overview. It is not included to promote a belief system. Religious texts like the Bible, Koran and Torah continue to serve as the foremost guides to the non-consequentialist approach to ethical theories. They provide two great moral commandments, which are also the cornerstone of good ethics. A.

Justice: Fair dealings in trade. (Thou shalt not keep the labourer’s wages overnight) Fair punishment for crimes (Thou shalt give life for life, eye for eye, tooth for tooth)

B.

Love: Love God, love thy neighbour, love thine enemies.

This Element of Holiness also incorporates the “Golden Rule”, and avoidance of the Seven Deadly Sins.

HOLINESS PART TWO: THE GOLDEN RULE “Do unto others as you would have them do unto you.” The above is referred to as the Golden Rule – a principle widely shared by religious and social institutions due to its concise statement of purpose and principle. Christian: And as ye would that men should do to you, do ye also to them likewise (Luke 7:31). Jewish: Do not do to others what you would not want them to do to you (Shabbat 31a). Islam: None of you is a believer as long as he does not wish his brother what he wishes himself (Forty Hadith of an-Nawawi, 13). Hindu: One should not behave towards others in a way which is unpleasant for oneself: that is the essence of morality (Mahabharata XIII 114, 8).

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Buddhist: A state which is not pleasant or enjoyable for me will also not be so for him; and how can I impose on another a state which is not pleasant or enjoyable for me? (Samyutta Nikaya V, 353-35-342-2). Confucian: What you yourself do not want, do not do to another person (Sayings 15-23). Aristotle: We should behave to others as we wish others to behave to us.

HOLINESS PART THREE: ETHICS AND THE SEVEN DEADLY SINS The Seven Deadly Sins, or the Capital Vices or Cardinal Sins, have their roots in early Christian teaching. They are those deemed the most serious impediments to one’s living a virtuous and reverential life, and for the believer, one’s salvation. The Seven Deadly Sins are introduced in this text, not for theological purposes, but rather to highlight those things which throughout the ages have tempted and distracted humankind away from a life of purpose and high ethical standards, and often down a path of self-destruction. The Seven Deadly Sins are: 1. 2. 3. 4. 5. 6. 7.

LUST GLUTTONY GREED SLOTH WRATH ENVY PRIDE

LUST is generally classified as excessive thoughts, or desires, usually of a sexual nature. GLUTTONY is over-indulgence or over-consumption of anything to the point of disrespect and waste. GREED like gluttony is a sin of excess. Greed can lead to hoarding, theft, violence, trickery and manipulation of authority, all in the pursuit of excessive material objects. SLOTH was originally considered the sin of sadness or despair but has now been long associated with being contrary to hard work, diligence and zeal. Sloth means one does not utilize and develop their talents and skills, and a tendency towards laziness. WRATH means anger, impatience, and or rage, often manifesting itself into uncontrollable hatred. ENVY is like greed and manifests itself by an insatiable desire to have and or control. Where greed is more often displayed with regards to matter things, envy is resentment for what others may have and for what you do not possess. 48

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PRIDE or vanity or hubris is traditionally listed as the original, and most serious of the Seven Deadly Sins. Excessive and misdirected pride makes one have an excessive and unjustified sense of self-importance and desire to be more important than others, and a corresponding failure to acknowledge the good, and good works of others. To counter the Seven Deadly Sins, religious and other institutions have listed virtues to combat the vices associated with these sins.

Vice

Virtue

Lust Gluttony Greed Sloth Wrath Envy Pride

Chastity Temperance Charity Diligence Patience Kindness Humility

Again, we consider the Seven Deadly Sins in our examination and study of ethics not necessarily for spiritual or theological purposes, but to highlight those vices which have tempted humankind from the beginning and which may from time to time challenge one’s own character and ethical standards.

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HOLINESS PART FOUR: GANDHI’S SEVEN DEADLY SOCIAL SINS Variations of the Seven Deadly Sins and the examination of vice and virtue have long interested and been written about for centuries. Among those who presented their own variation on these themes was Mohandas Gandhi, a Hindu who sought political and social change through nonviolent means (and who would himself be assassinated in the process). Gandhi modified the original Seven Deadly Sins into a list of Seven Deadly Social Sins. 1. 2. 3. 4. 5. 6. 7.

WEALTH WITHOUT WORK PLEASURE WITHOUT CONSCIENCE SCIENCE WITHOUT HUMANITY KNOWLEDGE WITHOUT CHARACTER POLITICS WITHOUT PRINCIPLE COMMERCE WITHOUT MORALITY WORSHIP WITHOUT SACRIFICE

Therefore, the study of the Seven Deadly Sins is also a study of philosophy, and human nature and behaviour, something which continues to this day. Ethics = habit and character. Vices tempt and challenge these. How you respond to any of the Seven Deadly Sins, or other such pressures can determine how ethical you are, your character and reputation – and your destiny.

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3-11 THE FOURTH QUEST: GOOD ETHICS LEADS TO HAPPINESS The Utilitarianism ethical theory states that the key objective should be the greatest happiness for the greatest number of people. Succinctly stated, pleasure is good; pain is evil. Therefore, strive for what is good. This in turn leads individuals who lead ethical and virtuous lives into a state of happiness. Two quotations show how one should also lead a life of purpose and avoid overindulgence. The Greek philosopher Epicurus (341 – 270 BC) wrote: “Pleasure indulged only leads to greater desire; better to live a very frugal and disciplined life, so that desires will not multiply and become insatiable, leading to the pain of frustrated desire”. Writing 2,000 years later, the English philosopher Jeremy Bentham (1748 – 1832) would write that: “Service to the community creates more pleasure than service to self, while service to the long term produces more cumulative pleasure than service to the short term”. Therefore, the definition of ethics is both concise and broad, incorporates many different theories and combines many elements. Applying ethics to business practices is now considered essential for success. In summary, there are four historic Quests that form part of our study of Ethics. These are:

➢ ➢ ➢ ➢

ETHICS = EXCELLENCE ETHICS INCORPORATE MORAL LAW ETHICS EMBODY AN ELEMENT OF HOLINESS GOOD ETHICS LEADS TO HAPPINESS

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3-12 THE THREE IMPERATIVES FOR HUMAN CONDUCT Having now been introduced to the history and the study of Ethics, we now focus on how individuals should ideally act and behave in an ethical and structured world. Have you ever wondered why you and others act in a certain way? Why do people do the right thing, while others do not? There are three imperatives for human conduct that in a well-ordered society would see human welfare; human justice and human dignity reach their fullest potential. The following three imperatives are the backbone of ethical human conduct.

Based upon these three imperatives, in your opinion, how is society as a whole fulfilling these mandates and how strong is the ethical and moral climate around us? (Mark your current opinion). Terrible _____ Poor _____ Fair ______ Good ______ Excellent _____

Again, in your opinion, is human conduct and our society as a whole 52 REIC 2600 Ethics and Business Practice improving? Not improving _______ Remains the Same _______ Yes improving ________

3-13 TEN VALUES WHICH DISTINGUISH CULTURES THAT FOSTER ETHICAL GROWTH The following is extracted from the book Value Shift. These ten values are offered as an example of what concepts and attitudes distinguish and differentiate cultures that foster economic growth in business, and by extension stability in society. Successful companies and institutions are often cited as having a “culture” of success and strong values and principles. Excellence can breed excellence. 1. An orientation of the future as against the present or past. 2. A positive attitude toward work as against work as a burden. 3. A propensity to save and invest as against income equality. 4. Mass availability of education as against education for the elite. 5. Fairness in advancement as against cronyism and connections. 6. Trust in a broad range of extended communities as against trust primarily in the family. 7. A strong ethical code and a relative absence of corruption, without resorting to sanctions. 8. Justice and fair play against who you know and how much you pay off. 9. Dispersed authority and broad empowerment as against hierarchy and command and control systems. 10. Religion as essentially a private matter allowing for plurality and dissent as against orthodoxy and conformity. The above are all hallmarks associated with individuals and companies that have achieved economic growth and financial stability and viability. They confirm that good ethics equates to good business. What is your personal and corporate culture?

Source: Lynn, Sharp Paine, And Value Shift: Why Companies Must Merge Social and Financial Imperatives to Achieve Superior Performance, New York: McGraw-Hill, 2003)

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3-14 ETHICAL ROLE MODELS: IN-CLASS ASSIGNMENT We learn from experience. One of the best and most important examples of this is what we can learn, and how we can be influenced by observing, and being mentored by others. Throughout your personal and business lives, you will encounter many, many people. From some, you will learn what to do and act; from others, what not to do. It is what you absorb from these experiences which influence (perhaps more than you realize) your personality, character and ethics. For this assignment, think of who has been the most important ethical role model in your life. Answer the following questions. We will review our responses in class. 1. The most significant ethical role model in my life is/was: ________________________________________________________________________ Because:________________________________________________________________ ________________________________________________________________________ 2. The main things I learned from them were: ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 3. Did this person know of their influence on your life? ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 4. Did you acknowledge their impact? ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 5. Are you/will be someone’s ethical role model? ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________

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3-15 CONCLUSION – KEY POINTS 1) There is a long and rich historical tradition with regard to both the theory and study of ethics. This course provides only a brief overview. You are encouraged to continue your own review of ethics and values. 2) There are four major ethical theories and traditions: 1. 2. 3. 4.

Consequentialist Non-consequentialist Utilitarianism Moral Law

3) There have been several influential philosophers and religious figures that have defined and shaped ethical studies and traditions. 4) These historical theories and traditions are meant to both awaken and enhance your own ethics and ultimately your personal actions and characters. 5) There are four ethical quests that philosophers and ethicists have studied through the ages. These are: 1. 2. 3. 4.

Quest No. 1: Quest No. 2: Quest No. 3: Quest No. 4:

Ethics = Excellence Ethics Incorporate Moral Law Ethics Embody an Element of Holiness Goods Ethics Leads to Happiness

6) The study of history, philosophy and ethics will incorporate a review of religion, the Bible and other creeds. As one of the Four Historical Quests is Holiness, we do so in this course as well. 7) The Three Imperatives for Human Conduct are: 1. Do good, or at least do no harm. 2. Observe the requirements of justice. 3. Respect persons. 8) Ethics and values are linked. The study of ethics is a detailed discipline. Values are a more personal matter. 9) Ethics are connected to character, integrity, law, morals and values. 10) Human beings have the ability to learn by example, either good or bad. We are fortunate in our lives if we have mentors who instruct us by example and words.

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CHAPTER FOUR

GOALS AND OBJECTIVES: Chapter four will explore several topics including: virtue and character, moral conflict, ideal moral judgment, and developing ethical values. It will conclude with three in-class activities that involve assessing your own moral judgment, the “Ethics Check” and ways of determining the right course of action.

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ETHICAL VALUES AND MORAL REASONING

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CHAPTER FOUR – TABLE OF CONTENTS ETHICAL VALUES AND MORAL REASONING 4 -1 DEVELOPING ETHICAL VALUES .............................................................................................61 4-2 DEFINING VIRTUE AND CHARACTER......................................................................................62 4-3 REAL ESTATE PROFESSIONALS AND THEIR CODE OF ETHICS AND PRACTICE STANDARDS ...63 4-4 MORAL CONFLICT ..................................................................................................................64 4-5 THE CONCEPT OF MORAL REASONING .................................................................................66 4-6 MORAL REASONING AND JUDGMENT DEFINITIONS .............................................................67 4-7 FEATURES OF THE IDEAL MORAL JUDGMENT .......................................................................68 4-8 IN-CLASS ASSIGNMENT #1 – ASSESSING YOUR MORAL JUDGMENT ...................................69 4-9 THE ETHICS CHECK .................................................................................................................70 4-10 IN-CLASS ASSIGNMENTS #2 – “THE ETHICS CHECK” ..........................................................71 4-11 IN-CLASS ASSIGNMENT #3 – “THE RIGHT THING TO DO” ...................................................73 4-12 CONCLUSION – KEY POINTS ................................................................................................76

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4 -1 DEVELOPING ETHICAL VALUES Consider the following questions with regards to the state of your own ethics and how you currently decide on what to do, or not to do. ✓ ✓ ✓ ✓ ✓

Can you develop ethical values and standards? How do you develop these ethical values and standards? How do you currently decide what is right from wrong? Do you follow a process when making your decisions? Upon reflection, what role do ethics currently play in your decision-making style?

To first understand the development of ethical values, we must contemplate what the two key components of this process are: Ethics: the discipline dealing with what is good and bad and with moral duty and obligation; a set of moral principles or values. Values: worth in usefulness or importance to the possessor; utility or merit; a principle, standard, or quality considered worthwhile or desirable. Ethics and values are linked. The study of ethics is a detailed discipline as we have reviewed in previous sections. Values are a more personal matter. Over time, each of us will develop our own set of values, in effect our own personal code. Some will reflect greatly on such matters. Others will not. The character we display, the words we speak or write, presents our ethics and our values to others and the actions we take. Ultimately, we alone are responsible for our own ethics and values first and foremost.

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4-2 DEFINING VIRTUE AND CHARACTER WHAT DEFINES VIRTUE AND CHARACTER? Character and virtue are intertwined. Both can be clearly defined. Your character is built upon your virtues. Philosophers have long contemplated and sought to define what character is, and how to define it. The ancient Greeks reduced the concept of character to the sum of four integral virtues: A.

FORTITUDE: Strength of mind along with the physical and moral courage to persevere in the face of adversity.

B.

TEMPERANCE: Self-discipline to control passions and appetites.

C.

PRUDENCE: Practical wisdom and the ability to make the right choice in specific situations.

D.

JUSTICE: Fairness, honesty, lawfulness, keeping promises.

The Greeks quests to define good character have not really been improved on over the centuries. In 1992, a group of modern educators and philosophers listed what they concluded were the core elements of character, and what is very similar to that of Greeks. A. B. C. D. E. F.

TRUSTWORTHINESS RESPECT RESPONSIBILITY CARING FAIRNESS CITIZENSHIP

Therefore, we review philosophy and history to understand and appreciate that the quest to define ethics and what constitutes good character is ongoing and has been so since recorded history. Some concepts and principles are timeless. As we will explore in this course, defining good ethics is not the challenge, exercising them is.

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4-3 REAL ESTATE PROFESSIONALS AND THEIR CODE OF ETHICS AND PRACTICE STANDARDS Having considered the preamble to the REALTOR®’s Code, and the REIC definition of ethics being “Guidelines or rules by which we aim to live”, the true real estate professional will know that: ❖ Ethical behaviour conforms to guidelines and rules. ❖ The first step of ethical decision-making is to check the rules/laws/guidelines, if any, on a particular issue. In this course, you will review the Codes of Ethics and Professional Standards for the Real Estate Institute of Canada, the Institute of Real Estate Management and the Canadian Real Estate Association. These Codes together with supporting materials provided by various real estate associations, training and educational seminars, and personal and corporate professional development leave no opportunity for someone who works in the real estate industry not to know what is expected of them. The courts have also reaffirmed this many times over. The real estate practitioner is deemed the expert and as such has the highest level and duty of care to their clients and the public. Just like any other legislative profession, the real estate professional will not have any excuse for incompetence or unethical behaviour. The following court case sums up the judicial system's attitude with regard to the duty of care entrusted to and expected of real estate professionals.

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4-4 MORAL CONFLICT Throughout one’s life, in both personal and professional matters, you will face moral conflicts. No one is exempt from this reality. While the scope, size and consequences of these conflicts will vary, often greatly, based upon one’s position, stature and responsibilities, we will all face moments in our life where we must think, decide, and act in a way which defines us. How we respond to our own moral conflicts will ultimately strengthen or weaken us. Our own sense of worth and happiness will flow from our decisions. No one who is a good and decent person can truly, and for any real length of time, be content, or at peace with themselves if they are in conflict with themselves – and others. Your conscience and your values will not let you. No short-term gain, monetary, power, prestige or otherwise can justify unprofessional, illegal or immoral actions and behaviour which one has deceived themself into believing justifies the means to an end. Consider the Real Estate Institute of Canada’s Ethics Check. Reflect on each of the three checks: 1. 2. 3.

Is it legal? Is it balanced? How will it make me feel about myself?

Consider these three checks when you are conflicted. This is a systematic and progressive review of how to review decisions and moral conflicts. It is meant to reinforce professionalism and solid ethical behaviour and action. When you act honestly, ethically and professionally, you are liberated. Your conscience will be clear. You will not have to live a life “looking over your shoulder”, nor be concerned about having your actions challenged or reported now, or later. Always remember that your reputation (how you do your job) is coupled with your professional and technical skills (what you know about your job). No professional, successful and content person can properly function, and truly live if they are in a state of unresolved moral conflict. This course, text, and our in-class discussions will assist your efforts to properly assess and address moral conflicts and to act ethically. Moral Conflicts surround us. They cannot be avoided. Below are the four responses to these. There is only one truly right answer. The other three responses are either wrong, incomplete, or will postpone and perhaps increase the conflict you are facing.

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No Decision

The Wrong Decision/ Action

Moral Conflict

The Right Decision/ Action

Incomplete Decision

Everyone will eventually experience moral conflict; sometimes it will be personal and/or professional. Real estate professionals often must make major decisions and take definitive action. Because real estate involves large assets, the flow of capital and resources, and a wide range of human emotions and trust – these moral conflicts are often large, challenging and emotional. As professionals, we should equip ourselves with the tools necessary to deal with these pressures. Finally, when reviewing the above diagram, consider substituting “moral conflict” from the center box, and replacing it with simply “your decision”. The purpose is to consider and reflect that each and every day we make numerous decisions, some relatively insignificant while others may be very important, and time-sensitive. As with our moral conflict deliberations, decisions must also be assessed and your response determined.

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4-5 THE CONCEPT OF MORAL REASONING The process of moving formally and informally from premise to conclusion about one ought to do in a given situation is the concept of MORAL REASONING. Moral reasoning is based upon analyzing a situation from a “moral point of view”. To do so, the person must look at two components of any issue: Rationality and Respect.

FIGURE 4-5: MORAL REASONING

RATIONALITY •The pursuit of one’s projects and purposes with attention to the alternatives, risks, and consequences to oneself . •*** This is called the “self-directed” component of moral reasoning ***

RESPECT •The consideration of the perspective of others in the pursuit of one’s projects. Involves a selfimposed constraint on rationality. •Involves a self-imposed constraint on rationality, because we reside in the same humanity as those who are likely to be affected by our actions. •*** This is called the “other-directed” component of moral reasoning ***

Rationality is “self-directed”. The person in question must be able to analyze and consider consequences for their actions. Emotions are excluded from this analysis and the person is thinking objectively prior to acting. Respect is referred to as the “other-directed” component of moral reasoning. The moral and ethical person will consider how their actions will affect others. In order to gain respect, they must show respect. Respect also involves a self-imposed constraint on rationality. Decision-making involves moral reasoning. The more detailed and analytical one becomes in their thought-action process, the more precise will be their decision-making style.

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4-6 MORAL REASONING AND JUDGMENT DEFINITIONS “The world is a dangerous Place to live, not because Of the people who are evil, But because of the people Who don’t do anything about it?” - ALBERT EINSTEIN (1879 – 1955)

VALUE: Morally neutral term that merely indicates a preference. VIRTUE: A quality of character by which individuals habitually recognize and do the right thing. MORALS: Principles of human duty. ETHICS: Science of morals – study concerned with principles of human duty. BUSINESS ETHICS: Branch of the science of morals concerning the conduct of professionals. INTEGRITY: Soundness of and adherence to moral principle.

***The above are powerful words – with clear meaning. But, without action, they remain just words. Solid moral reasoning depends on the individual possessing all of these traits, and exercising them to the highest standards possible.***

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4-7 FEATURES OF THE IDEAL MORAL JUDGMENT How do we further improve our moral reasoning and ethical decision-making style? The two keys to doing so are to continually refine and increase your knowledge, and work towards the ongoing enhancement of your morals and reputation. The more effort you put into these goals the more secure you will become in your decision-making style and the more confident you will be in your actions. Others will sense this and respect the consistency in your words and behaviour. There are six features of the ideal moral judgment. These are: 1. 2. 3. 4. 5. 6.

Conceptual Clarity Information Rationality Impartiality Coolness Valid Moral Principles

Conceptual clarity means you have clearly considered the decision for action to be taken. You have framed the key question(s) in your mind and you know what the issue(s) to be determined are. No further action can be taken until you are clear on this point. Information is essential. Knowledge is power and one must have all the current and relevant information at hand before further steps are taken. In addition to having information available, you must have the ability to analyze this data succinctly and concisely. Rationality means you must be objective and focused throughout this process. You must keep your emotions in check. You will refer to the conceptual clarity you have determined and focus only on addressing and resolving the issue currently at hand. Impartiality means you are not acting in a predetermined way that will favour one party or one outcome over another. Again you are being objective. Your final decision and action are balanced and fair. Coolness refers to poise under pressure or stress. By not “getting too high or too low” in the decision-making process or negotiations with others, you keep your focus and the conceptual clarity of the matter clear. Those who are regarded as being “cool” under pressure have a perceived advantage over those who are overly emotional and dramatic. Valid moral principles are essential for good ethics and good business. These are the foundation in which you have based your personal and professional activities on. These anchor your decision-making. Both sound moral judgment, and ethical decision-making and actions are dependent on trust. Trust in your own abilities and practices, and in others, is a cornerstone of a fair and equitable society and personal and business relationships.

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4-8

IN-CLASS ASSIGNMENT #1 – ASSESSING YOUR MORAL JUDGMENT

The following self-assessment is based upon Section 4.7 the Features of Ideal Moral Judgment. There are six features of the ideal moral judgment. These have been reviewed and included in each of these surveys. Objectively circle how you rate yourself with regards to each of these six key components. The first self-assessment is to be done in class. The second self-assessment is to be done at a later date (Ex. a year from now or when you believe you have significantly improved these skill sets). A.

In-Class Self-Assessment: Date _______________________ Conceptual Clarity Information Rationality Impartiality Coolness Valid Moral Principles

B.

Poor Poor Poor Poor Poor Poor

Fair Fair Fair Fair Fair Fair

Good Good Good Good Good Good

Excellent Excellent Excellent Excellent Excellent Excellent

Good Good Good Good Good Good

Excellent Excellent Excellent Excellent Excellent Excellent

Future Self-Assessment: Date ________________________ Conceptual Clarity Information Rationality Impartiality Coolness Valid Moral Principles

Poor Poor Poor Poor Poor Poor

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Fair Fair Fair Fair Fair Fair

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4-9 THE ETHICS CHECK There is a final checklist available when one is faced with an ethical dilemma or any question or course of action that must be contemplated on. This is the Ethics Check. Just like any checklist you may utilize, the Ethics Check provides you with one last opportunity to review the facts, and the decision you are to make. Ethics checks can be utilized in both your personal and business lives. They are especially important with regards to business ethics as good ethics translate into good business and this directly impacts an organizations stability and profitability. It also will determine how your clients are treated and largely how successful they are based upon your actions and decisions. Your reputation equals referrals, which in turn equal rewards. Business ethics are built on solid personal ethics. Consistency is desired in one’s personality and conduct. Therefore, business ethics relate directly to the quality of one’s personal life, the quality of service they provide, and ultimately one’s success – however, success is measured. How we treat ourselves, our families, our friends and employees and customers and the public as a whole does matter. Those who are successful in their personal and business affairs can always be linked to solid business practices and good ethics. Conversely, when one sees a failure in a person’s own affairs or that of their business there is a direct link to an ethical and moral failure. The Ethics Check therefore asks and challenges the individual to consider three critical questions before they decide and act. You cannot move through this checklist if the preceding question is answered in the negative.

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REIC “ETHICS CHECK”

HOW WILL IT MAKE ME FEEL ABOUT MYSELF? (EMOTIONS, MORALITY)

•Can I look at myself in the mirror? •Will it make me feel proud? •Would I feel good if my friends knew about it? •What would my REIC colleagues say?

IS IT BALANCED? (FAIRNESS, RATIONALITY) •Is it fair to all concerned in the short-term & long-term? •Does it promote the greatest happiness of the great number?

IS IT LEGAL?

(EXISTING STANDARDS)

•Will I be violating any laws, rules, regulations and policies?

4-10 IN-CLASS ASSIGNMENTS #2 – “THE ETHICS CHECK” REIC 2600 Ethics and Business Practice

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❖ Will I be violating any laws, codes, rules, regulations or policies? ❖ Is it balanced? (fairness, rationality) ❖ How will it make me feel about myself? (emotions, personal morality) Consider and answer the following questions: 1.

Do you have your own form of ethics check? □ Yes □ No □ . . . sort of

2.

If so, is it similar to the REIC Ethics Check? □ Yes □ No

3.

Do you see the REIC Ethics Check being helpful in your decision-making and business practices? □ Yes □ No Why? ______________________________________________

4.

How important to you is part 3 of the Ethics Check, “how will it make me feel about myself?” ______________________________________________ ______________________________________________

5.

Who would you least like to disappoint in your life? ______________________________________________ ______________________________________________

6.

Do you think about / care what others say about you? ______________________________________________ ______________________________________________

7.

How do you want to be remembered? ______________________________________________ ______________________________________________

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4-11 IN-CLASS ASSIGNMENT #3 – “THE RIGHT THING TO DO” Read each of the five following scenarios. Reflect on the various actions that are available for you to take. What do you honestly believe you would do in each case? Circle your decision. We will discuss the results in class. 1.

You are taking a real estate course with a colleague who is also a close friend. To complete the course requirements, the students must successfully pass a take-home assignment. The course outline clearly states that each student must complete their work and submit the assignment within one week. Your colleague has started his assignment when his youngest child suffers a severe allergic reaction and is hospitalized. In a panic he asks you for help on the exam saying, “you know I would have completed the course and exam successfully if my daughter wasn’t ill, I just need some help on some of the questions.” You already suspect several other students who took the course are sharing information and answers. What would you do? A. Provide the answers to the questions your colleague has asked for help on. B. Tell him that they must do their own work and you cannot help him. C. Tell him you can’t help him but give him the name of another student who you think will. D. While not giving him the answers, give him specific page numbers and where to look for the answers in the course text. E. Advise him to get an extension on the exam by advising the instructor of the situation.

2.

The projected budget for a property portfolio you oversee is to be submitted to your residential managers first thing tomorrow. You have been “busy” and have not collected all the data you need to complete the budget. You have a “pretty good idea” what the numbers will be. You, therefore, plan to submit a “fairly accurate” operations budget to the managers tomorrow. What would you do? A. Submit it. It’s only a projected budget. You can verify it in advance of the final budget. B. Ask for an extension before submitting. C. Call your owner. Advise that you have not been diligent on this matter. D. Call in sick.

3.

You are the sales associate of a hotshot condominium salesperson. You notice during your boss’s sales presentation he always provides the prospective purchaser with a specific square footage for the unit in question. Increasingly prospective buyers have asked if the balcony space is included in the “living space” measurement that has been presented. Your boss always says no. On your own, you measure several units and determine that the balcony space is included in the

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square footage and that it represents on average 8 – 12% of the unit’s entire space. You raise this matter with your boss who tells you “don’t worry about it, everybody measures the same way and, it is living space – May even be a solarium one day”. The next day a couple specifically asks if the balcony space is included in the living area calculation. They are particularly interested in this as they are comparing various condominiums on a per square foot basis. In your presence and that of the prospective purchasers, your boss again says “no”. What would you do? A. Nothing. B. Correct your boss in front of the prospective purchasers. C. Tell the prospective purchasers in front of your boss that everybody measures space the same so they should not worry about the balcony space calculation regardless. D. Quietly inform the prospective purchasers (but not your boss) that balcony space is included in the calculation. E. After this tour speak with your boss alone and ask him to make a clarification and a correction on their presentation to the prospective purchasers. 4.

You purchase some items from a big box home improvement store. You are not a fan of this store as you find it large and impersonal, and you resent that you do not have more shopping options in your vicinity. While being checked out the clerk was talking to their associate and not paying enough attention to their job. Later that day when you review your purchases with your invoice, you note that three items with a combined value of $48.00 were not charged for. What would you do? A. Nothing. B. Contact the store immediately and ask that they correct their mistake and charge you the $48.00. C. The next time you are in the store bring this matter to their attention and ask that you be charged the $48.00. D. Considering that you believe that you have been overcharged and underserviced for years by this store, and it was not your mistake, to begin with, keep the products and not worry about the consequences.

5.

You are the manager and leasing agent for an apartment. Your sister-in-law and her family wish to rent one of the apartment units once they relocate to your city in two months’ time. You are very proud of how hard you have worked to keep the apartment building in question in good condition and the tenant mix is strong. You also know your sister-in-law would be an excellent tenant. The key is to keep the unit available for the two month period, in a very busy market. One of your justifications would be that you know your sister-in-law would be a solid credit check and a trouble-free occupant. You may lose two months’ rent waiting for her, but you believe the long-term benefits are good for both your building and your employer. You currently have four offers to rent the unit on your desk, all of which you think are weak candidates. 74

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What would you do? A. Think of any excuse or reason not to make a decision until just before your sister-in-law is available to rent the unit. B. Ask your employer what they will permit. C. Remove the unit from the market stating that it is leased out even though no contract has been signed. D. Ask your sister-in-law to provide a security deposit and sign a lease even though she has not personally inspected the building and unit. E. Lease the unit to the best candidate of the four you have to consider. 6.

Your property management service contract calls for the payment to your firm to be based partially upon your efforts to minimize annual expenses and capital costs in your portfolio. You are counting on this year’s bonus as you enter the last three weeks of the year. You are then made aware that the main boilers in a major building you manage are in immediate need of replacement based upon accumulated neglect. To date, winter has been mild. If you replace the boilers now, you lose your bonus. What would you do? A. Nothing. B. “Band aid” the boilers until January. Then replace them. C. Replace the boilers immediately. D. Discuss this matter with your client and seek to amend your professional service contract bonus provisions, before commencing the work. E. Discuss this matter with your client and seek to amend your professional service contract bonus provisions, after completing the work.

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4-12 CONCLUSION – KEY POINTS 1.

The process of moving formally and informally from premise to conclusions about what one ought to do in a given situation is the concept of Moral Reasoning.

2.

Moral reasoning and judgment are concepts and processes that can be studied and incorporated into your own decision-making process. At the core are Rationality and Respect.

3.

Rationality is the “Self-Directed” component of Moral Reasoning. Respect is the “Other Directed” component of Moral Reasoning.

4.

Moral Reasoning is associated with six judgment definitions: ❖ Value ❖ Virtue ❖ Morals ❖ Business Ethics ❖ Integrity

5.

Moral judgment has six features: ❖ Conceptual clarity ❖ Information ❖ Rationality ❖ Impartiality ❖ Valid Moral Principles

6.

Trust is a key moral value.

7.

There are two main conflicts to face during the ethical decision-making process: I. Conflict of values. II. Conflicts of imperatives.

8.

Above all, Moral Reasoning is a process based upon ethics, character, and intelligence. The objective is to eliminate guesswork, bad decisions, and to be systematic in your deliberations.

9.

The Real Estate Institute of Canada created the Ethics Check as a guideline to use when in doubt. The three questions to ask are: I. Is it legal? II. Is it balanced? III. How will it make me feel about myself?

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CHAPTER FIVE

GOALS AND OBJECTIVES: Chapter five discusses how ethics intertwines with the decision-making process. Topics that will be explored include: decision-making styles, different personalities associated with the various decision-making styles and Maslow’s hierarchy of needs. Three in-class activities will showcase the importance of decision-making styles.

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ETHICS AND DECISION MAKING

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CHAPTER FIVE – TABLE OF CONTENTS ETHICS AND DECISION-MAKING 5-1 ETHICS AND DECISION-MAKING ............................................................................................81 5-2 PERSONALITY/DECISION-MAKING STYLES.............................................................................82 5-3 PERSONALITY/DECISION-MAKING STYLE – THE IDEALIST .....................................................83 5-4 PERSONALITY/DECISION-MAKING STYLE – THE INDIVIDUALIST ...........................................83 5-5 PERSONALITY/DECISION-MAKING STYLE – THE PRAGMATIST ..............................................83 5-6 PERSONALITY/ DECISION-MAKING STYLE – THE ALTRUIST ...................................................84 5-7 WHAT IS YOUR DECISION-MAKING STYLE? ...........................................................................84 5-8 IN-CLASS ASSIGNMENT #1.....................................................................................................86 5-9 MASLOW’S HIERARCHY OF NEEDS ........................................................................................87 5-10 IN-CLASS ASSIGNMENT #2 - REFLECTING ON MASLOW’S HIERARCHY ...............................89 5-11 WHY STUDY THESE CONCEPTS? ..........................................................................................91 5-12 IN-CLASS ASSIGNMENT #2 – SELF-ASSESSMENT .................................................................94 5-13 CONCLUSION – KEY POINTS ................................................................................................95

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5-1 ETHICS AND DECISION-MAKING Throughout our lives, we make decisions – each and every day. Some are minor, some more significant. Each of us has our own decision-making style and process. We may have a systematic approach to decision-making or a more casual approach. Reflect upon how you currently make your decisions. Do you have a process or pattern? Has your decision making evolved, or is it still under development? One of the main purposes of this course is to interject or reinforce, an ethical component into your decision-making. The Real Estate Ethic’s Check asks you to consider three essential questions: 1. 2. 3.

Is it legal? Is it balanced? How will it make you feel about yourself?

As a real estate professional, you will continually make decisions, for both yourself and often for your clients and others. You need to be organized and prepared to assume this responsibility, pressure and accountability. This section will introduce you to various personalities and decision-making styles and processes so that you better understand both yourself and others.

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5-2 PERSONALITY/DECISION-MAKING STYLES Your decision-making style will be a reflection of your character, virtues, beliefs, moral code and compass, ethics and practices. It will be developed throughout your lifetime. Whether or not you have considered and analyzed your own personal decision-making style, it will certainly encompass one of four main styles. While there usually is some overlap amongst these specific approaches, most individuals will have one of four dominant decision-making styles. You are now presented with the four decision-making styles. Each style has distinct components to it. Each has a primary concern; a motivating factor; and a self-justification for utilization style.

FIGURE 5-1: FOUR DECISION-MAKING STYLES

IDEALISM • Primary Concern – Principle • Motivation – Duty, Obligation • Justification – Value, Rules PRAGMATISM • Primary Concern – Situation • Motivation – Consequence • Justification – Facts INDIVIDUALISM

• Primary Concern – Self • Motivation – Self-Preservation • Justification – Reasons ALTRUISM • Primary Concern – Other (s) • Motivation – Greatest Good • Justification – Relationships

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5-3 PERSONALITY/ DECISION-MAKING STYLE – THE IDEALIST ❖ Concerned first and foremost with principles; governed by rules, regulations and values. ❖ The integrity of these values must not be sacrificed for any reason, relationship or desired consequence. ❖ Duties are absolute and must be adhered to absolutely. ❖ Commitment to principle and consistency is the primary criterion for decision-making. ❖ “High moral fiber” – may appear rigid and inflexible.

5- 4 PERSONALITY/DECISION-MAKING STYLE – THE INDIVIDUALIST ❖ Driven by the dictates of natural reason whose first law is personal survival and selfpreservation? ❖ The self is the source and justification of all actions and all decisions. ❖ Social relations and responsibilities are entered into with the full knowledge that it is in the individual’s own self-interest to do so. ❖ The primary overriding value is staying alive. “If I don’t take care of my own needs, I will never be able to address the concerns of others.” ❖ One’s personal reasons and agendas are the ultimate court of appeal for the Individualist, even if such reasoning degenerates into rationalization.

5-5 PERSONALITY/DECISION-MAKING STYLE – THE PRAGMATIST ❖ Concern for the situation is the overriding value. ❖ Motivated by the perceived needs of the moment and the potential consequence of a decision in particular circumstances. ❖ Justification is in the specific facts and the specific situation. ❖ Important principles and competing values may be sacrificed for the sake of producing certain results. ❖ Situational and shifting ethical stance may make a pragmatist an unpredictable coworker or superior.

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5-6

PERSONALITY/DECISION-MAKING STYLE – THE ALTRUIST

❖ Primary concern is for other people. ❖ May relinquish their own personal security for that of the group. ❖ Fundamental motivation is to produce the greatest possible good for the greatest number of people. ❖ Chief justifications for actions and decisions are upholding both the integrity of the community or group AND the overriding value of interpersonal relationships. ❖ Enter into the community with others not out of self-interest, but out of a desire to contribute to the common good and make the world a better place.

5-7 WHAT IS YOUR DECISION-MAKING STYLE? A.

Your personality and decision-making style will likely incorporate some of all of the four decision making styles.

FIGURE 5-2: DECISION-MAKING STYLE

Individualist

Pragmatist

You

Altruist

Idealist

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B.

Most individuals have dominant characteristics that distinguish their attitudes and actions. This is the case when we make decisions. We generally have one dominant decision-making style that overrides our ultimate course of action. This dominant decision-making style will also incorporate some of the other three decision making styles in different proportions. It is important to know your own decision-making style. You should also understand how this may impact your business activities and decisions. This analysis will also help you understand the other party you are working with on a project or other matter.

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5-8 IN-CLASS ASSIGNMENT #1

Based upon the information presented in this section, and your own decision making practices, what is your decision making style? Does it differ between your personal and business decisions or is your style the same for all actions you take? Below are the four decision making styles. Rank your own personal style from 1 (your primary style) to 4 (the style which least influences your decision making).

Altruism

______

Idealism

______

Individualism

______

Pragmatism

______

Having ranked your personal decision making styles above, now weigh these styles as a percentage of your 100% decision making style process:

1.

_______________

__________%

2.

_______________

__________%

3.

_______________

__________%

4.

_______________

__________% 100%

What does this tell you? What are its implications for you?

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5-9 MASLOW’S HIERARCHY OF NEEDS

ABRAHAM MASLOW (1908 – 1970) “What is necessary to change a person is to change his awareness of himself.”

Abraham Maslow was an American born Psychologist. He is most renowned for his “Hierarchy of Human Needs” and is considered the father of humanistic psychology. It was while studying at the University of Wisconsin that Maslow began his original line of research, studying primate dominance behavior and sexuality. Between the 1950s and 1960s Maslow became the leader of the Humanistic School of Psychology which became a third force in psychological studies beyond Freudian theory and behaviorism. Maslow saw human being’s needs arranged like the steps of a ladder, with the most basic needs at the bottom, ascending to the top of the ladder, or pyramid where one achieves selfactualization. Originally published in 1954 Maslow’s Hierarchy of Needs has formed the basis of similar research into human behavior thereafter.

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FIGURE 5-3: MASLOW’S HIERARCHY OF NEEDS

SELFACTUALIZATION NEEDS The degree to which you are motivated to reach your potential

ESTEEM NEEDS

The degree to which you are motivated to gain respect and prestige

AFFECTION & AFFILIATION NEEDS The degree to which you are motivated to satisfy the need to belong

SECURITY NEEDS The degree to which you are motivated to satisfy security & safety needs

PHYSICAL NEEDS The degree to which you are motivated to satisfy physical needs

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5-10 IN-CLASS ASSIGNMENT #2 - REFLECTING ON MASLOW’S HIERARCHY 1.

Does this Hierarchy of Needs make sense to you? Yes _____

No _____

Comments

2. Do you see this Hierarchy in play in your personal and professional lives? Yes _____

No _____

Comments

3. How can knowledge or application of Maslow’s Hierarchy of Needs influence your business or personal decision-making styles and how you assess or respond to others?

4. If Maslow’s Hierarchy of Needs applies to you, it must apply to others. How will knowledge of this theory affect your dealings with other parties?

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5. Where are you currently on this pyramid?

6. To reach the top and satisfy the Self-Actualization Need for myself, I should/will:

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5-11 WHY STUDY THESE CONCEPTS? “A man’s character is his fate.” Heraclitus (Greek Philosopher) c. 540 – 480 B.C. The study of ethics is the study of character and habits. The Greeks considered the pursuit of excellence as a virtue. There can be no argument that good ethical behaviour and solid character are also virtues, and desired. Who does not want to be considered in a positive light, and someone who represents the best in human nature? Why then do we so often fall short with regards to our words and deeds? One reason is we may not know ourselves well enough or perhaps are not honest about our own strengths and limitations and where we need to improve ourselves. This requires serious self-assessment, which itself can be difficult. This self-examination will include. ❖ WHAT AND HOW YOU THINK ❖ WHAT IS IMPORTANT TO YOU ❖ WHAT MOTIVATES YOU ❖ WHAT TEMPTS OR DISTRACTS YOU ❖ WHAT YOU ARE PROUD OF ❖ WHAT YOU ARE NOT PROUD OF ❖ WHAT YOU ARE OPTIMISTIC ABOUT ❖ WHAT YOU ARE PESSIMISTIC ABOUT ❖ WHAT YOU ARE PREPARED TO WORK FOR ❖ WHERE YOU EVENTUALLY WANT TO BE IN LIFE ❖ WHAT YOU WISH TO BE REMEMBERED FOR – AND BY WHO

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By studying theories and concepts such as Decision-Making Styles, Maslow’s Hierarchy of Needs, and the Seven Deadly Sins, we learn about ourselves, including what motivates us, what may explain how and why we act, and what can distract and tempt us away from ethical behaviour and our potential. DECISION-MAKING STYLES You will now have a better idea of what type of decision-making style you most often apply, or which of these is your most dominant style: ▪ ▪ ▪ ▪

ALTRUIST IDEALIST INDIVIDUALIST PRAGMATIST

Knowing your decision-making style allows you to structure, as best you can, actions and decisions that you will feel positive about and in keeping with your own sense of priorities. MASLOW’S HIERARCHY OF NEEDS Maslow’s Hierarchy of Needs is based upon a pyramid that starts with our most basic requirements of life moving upwards until (hopefully) contentment and fulfillment. From top to bottom, the Hierarchy of Needs is: ▪ ▪ ▪ ▪ ▪

SELF ACTUALIZATION NEEDS ESTEEM NEEDS AFFECTION AND AFFILIATION NEEDS SAFETY AND SECURITY NEEDS PHYSIOLOGICAL NEEDS

Your character, behaviour, and hence your ethics will be challenged by where you currently are in this pyramid, and by how personally you are satisfied, or not, as you move upwards (or stall on your way) towards Self Actualization. If, for example, you do not have adequate food or shelter, or you fear for the safety of you or your loved ones, you may act in a way out of your normal character in response to these threats. Also, as you move up the pyramid, how are you doing so? Can you realize self-actualization without achieving this state through ethical means and actions?

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THE SEVEN DEADLY SINS The Seven Deadly Sins or variations thereof, are: 1. 2. 3. 4. 5. 6. 7.

LUST GLUTTONY GREED SLOTH WRATH ENVY PRIDE

They individually and collectively test our character and ethics. People take short-cuts or may act inappropriately in the pursuit of something they either do not consider a vice, or which they have tried to deceive themselves is not. Consider the worst ethical behaviour you can think with regards to a public figure or someone you know. Which of the Seven Deadly Sins was involved, and why? (And as a consequence, how will this person ultimately be remembered for).

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5-12 IN-CLASS ASSIGNMENT #3 – SELF-ASSESSMENT Based upon my Decision-Making Style: where I am on Maslow’s Hierarchy of Needs; and the threats such as the Seven Deadly Sins (or variations thereof), it would be both prudent and practical for me to personally assess my strengths and weaknesses and where I can improve these processes:

PERSONAL: ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________

PROFESSIONAL: ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________

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5-13 CONCLUSION – KEY POINTS 1.

Our decision-making style is not a result of chance. Whether we know it or not, we have a dominant individual style to our character and actions. One should know how and why they are motivated to act in certain ways.

2.

There are four main decision-making styles: • Altruist • Idealist • Individualist • Pragmatist We will all have a dominant personality and decision-making style. It will likely combine one primary feature and incorporate other components to a lesser degree.

3.

Has your decision-making style served you well in your business and personal affairs? Has it changed or been refined over time and with experience? Use these theories and approaches to refine and improve your actions.

4.

Regardless of your decision-making styles, the professional is always bound to adhere to their association’s Code of Ethics and Professional Standards.

5.

Maslow’s Hierarchy of Needs provides a practical theory as to what motivates us – and others.

6.

The five components of Maslow’s Hierarchy of Needs (from top to bottom) are: • Self-Actualization Needs • Esteem Needs • Affection & Affiliation Needs • Security Needs • Physical Needs

7.

The Seven Deadly Sins or other vices put our ethics and character to the test when challenged or tempted.

8.

Knowing yourself and being able to comprehend how and why other people act is a powerful tool in your business and personal matters.

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CHAPTER SIX

GOALS AND OBJECTIVES: Chapter six explores the eight-step systematic approach to ethical decision-making and how both IREM and REIC approach ethical decision-making. This chapter will conclude with useful ways of putting your decision-making style into practice.

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APPLIED ETHICS AND DECISION MAKING

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CHAPTER SIX – TABLE OF CONTENTS APPLIED ETHICS AND DECISION-MAKING 6-1 APPLIED ETHICS ................................................................................................................. 101 6-2 A SYSTEMATIC APPROACH TO DECISION-MAKING: THE EIGHT-STEP PROCESS ............... 103 6-3 IN-CLASS ASSIGNMENT #1 – YOUR DECISION-MAKING PROCESS..................................... 105 6-4 ETHICAL DECISION-MAKING WORKSHEET -THE EIGHT-STEP PROCESS ............................. 106 6-5 INSTITUTE OF REAL ESTATE MANAGEMENT – FIVE QUESTION METHOD......................... 107 6-6 IN-CLASS ASSIGNMENT #2 – THE IREM APPROACH .......................................................... 107 6-7 ETHICS AND THE ART OF REAL ESTATE NEGOTIATIONS .................................................... 108 6-8 THE DECISION-MAKING PROCESS – A SUMMARY ............................................................. 110 6-9 PUTTING YOUR DECISION-MAKING STYLE INTO PRACTICE ............................................... 112 6-10 CONCLUSION – KEY POINTS ............................................................................................. 113

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6-1 APPLIED ETHICS Applied or practical ethics are based upon the history, theories, and insights gained through 4,000 years of humankind’s pursuit of ethics and excellence. What the process of applied ethics seeks to do is to create a process whereby they take the philosophy and goals of ethics and apply them to personal and business decisions. The goal is to make decisions, which combine solid and moral reasoning with steadfast ethics. Decision-making is never perfect, however, we should always strive to commit our best efforts and intellect to the process. When we apply ethics, we are attempting to find acceptable and morally defensible resolutions to our challenges and problems. Applied ethics combined with our own intelligence, expertise, standards, and morals (all of which we are always striving to improve and refine) will eliminate improper or poor decisions (and results), and lead to the best possible results, which can be achieved in any given situation. THE GOALS OF APPLIED ETHICS The goals of applied ethics are to have the individual, or group, study and engage moral theory and use this information in a practical analysis of the question(s) at hand. This intellectual pursuit will require the following steps. 1.

Recognizing Moral Issues Our first step is to gather facts and information and recognize within this data and problem the moral issues. This is a skill that can and should be refined through thought and experience.

2.

Developing the Moral Imagination Connected with Step No. (1), recognizing the moral issues, is developing the moral imagination. By this, we mean the ability (enhanced over time) to essentially see all sides of the issue, and “put yourself in the shoes of the other party or parties”. This goal is to develop our thinking and moral reasoning skills so that in a practical manner we are able to itemize, analyze and qualify all of the various points of view and goals and pressures faced by all parties involved. This perspective will result in more clearly focused decisions, which will consider all “angles”, consider alternative solutions, and lead to a solid and ethically defendable final decision.

3.

Sharpening Analytical and Critical Skills Knowledge never rests, nor should our pursuit of it. Real estate experts are deemed to be just that, experts and professionals in their chosen field of commerce. The courts demand this, and our Code of Ethics and Business Standards insist on it. The more we read and study, the more we involve ourselves in our profession, the more we learn from our successes, and failures, the sharper our analytical and critical skills will become. Analyze, reflect, apply ethics, and then act.

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4.

Assessing and Resolving Disagreements If a situation requires the application of detailed applied ethics, by its very nature, it has likely resulted because of a series of disagreements, and conflicting interpretations of facts and objectives. Sorting through these conflicts and disagreements is a skill. You must be able to assess various positions, an assortment of facts (which may or may not be agreed upon or interpreted differently by the respective parties), and work through this tension to a fair and morally acceptable decision. In such cases, your skill, knowledge and reputation are invaluable.

5.

Affecting Decisions and Behaviours We accept that good ethics are essential for a stable society and business climate. Therefore, we must be able to affect decisions and behaviour – that is, apply these ethics in a practical way which generates results. This is where theory becomes practice. Again, your reputation and the degree of respect you are held in by your peers and others will allow your decisions to become actions.

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6-2 A SYSTEMATIC APPROACH TO ETHICAL DECISION-MAKING: THE EIGHT-STEP PROCESS Ethical dilemmas can be addressed in a systematic and organized approach. Individuals, groups or companies can address ethical dilemmas following an eight-step format. This process analyzes the ethical dilemma from the beginning when the matter is analyzed, to when a final decision is made, and commitment to action is undertaken. The following is the eight-step process to decision making. 1.

Recognize there is a moral issue Is there something wrong personally, interpersonally or socially? Is there a conflict that could be damaging to individuals?

2.

Collect all the facts What are the relevant facts of the situation? Gather as much information as you can without jumping to conclusions. How did the ethical dilemma evolve? How important are pressures within the work environment in influencing which option you might choose?

3.

Define the ethical issues What is the main area of concern in this ethical situation? Identify the key organizational values that may be at stake. Are there some values that are more important than others?

4.

Who will be affected by the decision? Identify the people or groups that could be affected by your decision and try to see their point of view. Seeing situations from someone else’s point of view is an important and very useful skill. The most important question is: Will everyone be treated fairly by the action you decide to take?

5.

Identify and evaluate the alternative solutions Every problem has a number of alternative solutions. Identify and evaluate each solution to see which one is the best. Will there be positive, negative, or neutral side effects? Even if everyone doesn’t get what they want, will everyone still be treated fairly? Which option would promote the common good and help all participate more fully in the ideas we share as a society, as a community, as a company?

6.

Identify your responsibilities along with the consequences of your actions. Review all of the possible solutions. Think about the responsibility you have when committing to an action – or avoiding one – even if it is unpleasant. Are the proposed solutions legal, moral, culturally acceptable, and in keeping with good business practices? Which action would do the best overall? Ask yourself, “What would I think if someone did this to me?”

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7.

Double-check your decision Ask. Seek advice. Consult. Speak out. Discuss your decision with the appropriate advisors such as your manager, labour relations, finance, or the ethics development office. Are you the right person to make the decision? If you are, and your instincts are still bothering you, go back to Step 1 to see if you need to gather more information and review the situation again.

8.

Commit to action Now that all options have been carefully considered, commit to action and stand by your decision. Once the situation has passed, it’s a good idea to consider how it turned out for all concerned. If you had to do it over again what, if anything, would you do differently? Also, sharing feedback with others on your experience is a great way to start a dialogue on ethics and values with your peers.

The professional should always be organized and detailed and take extensive and accurate notes. This is especially true for those working in the real estate industry where contract drafting and negotiation is ongoing. It is also recommended that the professional prepares and utilizes forms and documents from which to work on and complete transactions. This approach can also be taken with regard to ethical decision-making.

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6-3 IN-CLASS ASSIGNMENT – YOUR DECISION-MAKING PROCESS HOW EFFECTIVE IS YOUR SELF DECISION-MAKING PROCESS? (Circle Your Assessment) 1

Frame the Question

Poor

Fair

Good

Excellent

2

Ensure Legal

Poor

Fair

Good

Excellent

3

Collect and Analyze Facts

Poor

Fair

Good

Excellent

4

Define Ethical and Moral Issues

Poor

Fair

Good

Excellent

5

Identify & Evaluate Alternatives

Poor

Fair

Good

Excellent

6

Double Check Decision

Poor

Fair

Good

Excellent

7

Finalize Decision

Poor

Fair

Good

Excellent

8

Commit to Action

Poor

Fair

Good

Excellent

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6-4 ETHICAL DECISION-MAKING WORKSHEET BASED UPON THE EIGHT STEP PROCESS TO DECISION-MAKING Steps

Questions

#1

What is the ethical issue to be resolved?

#2

List all the facts pertaining to this situation?

#3

What is the main area of concern in this situation?

#4

Identify who will be affected by the decision?

#5

Identify and evaluate possible solutions.

#6

Identify your responsibilities and build a worst-case scenario for your preferred alternative.

#7

Evaluate your chosen decision by consulting with someone else. List any suggestions. Or return to step #1 for more info.

#8

Commit and implement an action plan.

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Notes

• • • • • • •

Alternative #1

Alternative #2

Alternative #3

• • • • • •

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6-5 INSTITUTE OF REAL ESTATE MANAGEMENT: FIVE QUESTION METHOD To further assist us in our decision-making process, the Institute of Real Estate Management (IREM) recommends that we follow the “Five Question Method”. This involves asking ourselves five central questions: 1.

Is it illegal?

2.

Who is affected by your decision? And how?

3.

What are the consequences of the decision?

4.

How do you feel about the situation?

5.

Have you examined all the alternatives?

6-6 IN-CLASS ASSIGNMENT #2 – THE IREM APPROACH After considering decision-making processes and the IREM Five Question Method, how would you respond to the following situations?

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6-7 ETHICS AND THE ART OF REAL ESTATE NEGOTIATIONS To be an effective real estate practitioner you must have solid analytical and technical skills and be able to communicate accurately, succinctly and with a sense of purpose. Unless you can convey your position or that of your client firmly and convincingly, your expertise and hard work to this point is not realized to its objective. Real estate is about communication, and negotiation is an integral part of this process. Negotiating is about: ✓ Processes ✓ Aims ✓ Outcomes That negotiation is an art is not an understatement. The most successful negotiators (regardless of the subject), combine technical and communication skills, knowledge, techniques and experience and confidence to achieve the best possible outcome possible for themselves and or their client(s). Business and life itself are about negotiation. We negotiate all the time, on both big and small matters. We negotiate even when we may not think we are. Remember, in much of life, certainly in business affairs, you obtain what you negotiate for, not necessarily what you think you deserve. There are books, courses, seminars, and organizations devoted solely to negotiation skill development. Many of these are real estate focused. You should explore these, especially those most applicable to your current and future work. All negotiation courses, guides and lists state their version of the “steps to successful negotiations”. Most offer variations of the following key steps: •

Know and prioritize your objective(s). Have clear instructions.



Know your material and analyze the relevant information, data and documentation.



Know your opponent. Assess their strengths, weaknesses and motivations.



Prepare a negotiation strategy. Be prepared to compromise where necessary. Keep your focus on the main objectives. Seek common ground where warranted.

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Use the three “C”s to ensure you present your case effectively. o

o

o



CONVICTION is self-evident. You believe in what you are saying and are trying to achieve. An experienced negotiator can quickly assess true conviction and sincerity, and what and why the parties are insistent on achieving certain and specific objectives. CLARITY leads to precision in your presentation and position. Negotiate in an efficient, precise and clearly understood manner. There should be no misunderstandings in your verbal agreements, and certainly none in written form. CONFIDENCE is clearly felt by both yourself and the other party. Being prepared, knowing your power and having a plan of action you believe in can lead to success and creates a confidence that will be present throughout your negotiations.

Always be professional, ethical, and trustworthy.

Always remember that a good or great negotiator is a combination of their technical skills and knowledge, communication and writing skills, and above all, the image they project, and the reputation they have earned. You may well be hired because of your negotiation skills and reputation. This will generate and enhance your level of remuneration and importance to your firm or organization. Be organized and be proactive in the presentation and defense of your position and objectives. Always be prepared to listen to and understand the other side’s position. Seek meaningful and equitable compromise. Always focus on the long term. Never overstate your authority. Never misrepresent or deceive. If you lie, you will eventually be caught – and your credibility destroyed. While you can always improve your negotiation skills through preparation practice and experience, you may never be able to rehabilitate or recover from a poor or damaged reputation. It will precede you into your negotiations. Therefore, at all times, remember, Good Ethics means Good Business.

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6-8 THE DECISION-MAKING PROCESS – A SUMMARY Previously we reviewed the Two Components of Success. We examined the interconnection between expertise and reputation. -

WHAT YOU KNOW ABOUT YOUR JOB - Expertise - Information - Knowledge - Technical Skill

-

HOW YOU DO YOUR JOB - Reputation - Credibility - Respect - Trust

Your decision-making style will ultimately reflect these Two Components of Success. The quality and scope and finality of your decision are a direct reflection of your skill, knowledge, expertise, and experience. And, the stronger your reputation, credibility, and the trust and respect you command, the more readily accepted your decision will be, and the greater the possibility it will be implemented, and bear positive results. In this Section, we have reviewed and discussed various decision-making processes and guidelines, all of which are meant to assist you with sequential, practical, professional, and ethical decision making. All of these formats are based upon similar tried and true steps. While the preceding decision-making processes may expand, or modify these essential steps, in summary, ethical decision-making will include these basic reflections and actions: 1.

FRAME THE QUESTION(S) AND ASSIGNMENT Determine and clarify the question or concept you are analyzing and which you must make a decision on, and then act upon. Refine and clarify the concept and question(s).

2.

ENSURE LEGAL REQUIREMENTS ARE MET Ensure that no legal or statutory laws and rules and regulations are breached.

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3.

COLLECT AND ANALYZE FACTS Collect and examine all relevant information and facts that are necessary to make a sound final decision. Always be thorough, detailed and professional in this factgathering. Be rational and impartial in your deliberations. Apply all of your professional skills and expertise to assess and analyze these materials, determine the relevant facts and begin to formulate courses of action leading to a final decision.

4.

DEFINE ETHICAL AND MORAL ISSUES Recognize and define the moral dilemma and ethical issues associated with this matter. Your assessment will include your personal ethics and standards; those of your employer; and those of any professional organization you voluntarily belong to. You will also consider and reflect upon who will be affected by your decision, and how.

5.

IDENTIFY AND EVALUATE THE ALTERNATIVE SOLUTIONS Every problem has the potential for a number of alternative solutions. While assessing facts and the scope of the assignment, the professional is always challenging himself or herself to ensure they are addressing the central issues they have been engaged to review, as well as other possible amendments, and or, solutions to the same problem(s). This process ensures their final decision is the best possible decision and action plan; furthermore, that alternative solutions have been evaluated, and have either been disregarded or possibly incorporated into the final decision. This allows for additional focus and refinement. The professional will always be prepared to defend their final decision/action, and why it is superior to alternative solutions. As it is most likely your associates or clients will ask you if there are other possible solutions to the assignment. Be prepared to both review these as part of your presentation, and defend your final decision against alternative solutions.

6.

DOUBLE CHECK YOUR FACTS AND DECISION. COMMIT TO ACTION. Ask, seek advice, consult, and review your preliminary decision with your team or trusted advisors. Review and verify again all facts that your decision rests upon. Once your decision is finalized – Act!

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6-9 PUTTING YOUR DECISION-MAKING STYLE INTO PRACTICE Having reviewed the preceding sections, ask yourself the following five questions 1. Have I consciously followed the decision-making processes presented (perhaps with some modification) in my personal and business decision-making process to date?

2. Upon reflection would the decisions I have made (think of some major decisions you have already made) have been better formulated and achieved better results for me had I followed the moral reasoning and decision-making process presented.

3. Do I make better decisions alone or in consultation with others?

4. Do I see myself becoming more systematic in my decision-making process or carrying on as I always have?

5. How and why do applied ethics help my decision-making?

These questions should be reflected on and answered honestly. Again, if we consider only your business practices, your ethics and decision-making style must be precise. Due to the critical decisions, you must make in your business life and the financial and personal implications these decisions will have on various parties, it is incumbent that you have order in your affairs.

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6-10 CONCLUSION – KEY POINTS 1.

Decision-making is a sequential process. It involves the gathering of facts and a clear and objective analysis of the situation and all available options.

2.

We will all develop our own decision-making style. Knowing the most prevalent styles and how effective they are should allow you to adjust or refine your own actions.

3.

A systematic approach to decision making reduces the possibility of incomplete or simply bad decisions being made and acted upon.

4.

The professional will, through experience and by applying their own skill set and personality, develop their own decision-making style. This may include guidelines such as the Eight Step Process, or the Institute of Real Estate Management’s Five Question Method – or your own modification thereof.

5.

The Institute of Real Estate Management (IREM) offers a five-question method to review your decisions: 1. Is it illegal? 2. Who is affected by your decision? And how? 3. What are the consequences of the decision? 4. How do you feel about the situation? 5. Have you examined all the alternatives?

6.

You will note that the IREM five-question method is similar to the Real Estate Institute of Canada’s three-part Ethics Check: ✓ Is it legal? ✓ Is it balanced? ✓ How will it make me feel about myself?

7.

Applied ethics is putting what we have learned into practice. It combines ethical tradition, history and philosophy together with a sequential decision-making process to make the best possible decision and one which is morally defensible.

8.

Consistency in thought and action are hallmarks of a true professional. Good ethics is good business. Your decision-making should always reflect this.

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CHAPTER SEVEN

GOALS AND OBJECTIVES: Chapter seven will identify the major links between ethics and law as well as provide an introduction to REIC’s Code of Professional Standards. It will conclude with exploring how the board of directors handles ethics, accountability and responsibility.

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CODES OF ETHICS

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CHAPTER SEVEN – TABLE OF CONTENTS CODES OF ETHICS 7-1 CODES IN HISTORY.............................................................................................................. 119 7-2 CODES OF ETHICS AND CODES OF PROFESSIONAL CONDUCT AND STANDARDS .............. 120 7-3 CODE OF ETHICS AND PROFESSIONAL STANDARDS: COMMON LINKS ............................. 122 7-4 AN INTRODUCTION TO OUR CODES ................................................................................... 124 7-5 ETHICS AND THE DISCIPLINARY PROCESS........................................................................... 127 7-6 BOARD OF DIRECTORS: ETHICS, ACCOUNTABILITY AND RESPONSIBILITY ......................... 130 7-7 IN-CLASS ASSIGNMENT #1 – BOARD OF DIRECTORS AND MEMBER DISCIPLINE ............... 132 7-8 CONCLUSION – KEY POINTS ............................................................................................... 133

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7-1 CODES IN HISTORY Recorded history is rich in Codes and Laws that were established in order to provide a degree of stability and order in emerging civilizations. Beginning with the Greeks and thereafter, there have been laws associated with various eras of humankind. These laws were often based upon both religious practices of the time as well as the customs and practices of the society. One of the most famous of these is the Code of Hammurabi. The Code of Hammurabi takes its name from a former king of Babylon who reigned from 1792 B.C. to 1750 B.C. His Code is one of the most famous examples of ethics and standards being applied to a civilization. In this case his kingdom. His Code contained 282 laws, which covered the following: ✓ ✓ ✓ ✓

Economic laws governing issues such as tariffs and commerce Marriage and family laws Criminal laws for such acts as personal assault and theft Civil laws governing slavery and personal debt

Hammurabi believed that by promoting ethical behaviour and ensuring that first justice and then punishment would be applied to all wickedness, poor behaviour, and poor workmanship and services, then such practices would be reduced and then eliminated. Hammurabi further wanted to establish a kingdom where “the strong might not oppress the weak”. The following is an example of justice and penalties in the time of Hammurabi. “If a builder builds a house for a man and does not make its construction firm and the house collapses and causes the death of the owner of the house - that builder shall be put to death. If it causes the death of a son of the owner - they shall put to death a son of that builder. If it causes the death of a slave of the owner - he shall give to the owner a slave of equal value. If it destroys property - he shall restore whatever it destroyed and because he did not make the house firm, he shall rebuild the house which collapsed at his own expense. If a builder builds a house and does not make its construction meet the requirements and a wall falls in - that builder shall strengthen the wall at his own expense”. Codes and professional standards are therefore as old as recorded time. They provide stability and consistency and build upon the ethical traditions we have studied.

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7-2 CODES OF ETHICS AND CODES OF PROFESSIONAL CONDUCT AND STANDARDS Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. Through the REALTOR®, the land resource of the nation reaches its highest use and private land ownership its widest distribution. The REALTOR® is instrumental in molding the form of his or her community and the living and working conditions of its people. -

Preamble to the REALTOR® Code of Ethics

The above preamble to the REALTOR® Code eloquently and succinctly states the critical importance of real estate to any free civilization. It also reinforces how our country’s real estate industry and by extension its business enterprises are dependent on competent practitioners who possess the highest standards in ethics and skill. Professional associations must have a Mission Statement, which is their reason for being. This statement annunciates what the organization goals, principles and vision are. The statement will also tell what their individual and collective memberships are capable of. A professional organization must also have a Code of Ethics and Code of Professional Conduct and Business Practices and Standards. This is the organization’s declaration to the public that its members pledge themselves to the highest standards in their chosen field and that the consumer and public as a whole have the right to expect the highest ethical behaviour of the membership and the very best service possible. These codes are therefore the bible for the organization. Associations take great time and effort to first define and draft these codes, revising them only when it is prudent to do so or there is a legislative change that makes such amendments necessary. The most effective codes are concise, clearly defined, and consist of only enough sections to ensure that there are no grey areas with regards to conduct or performance. Effective codes are clearly stated, and both the membership and public grasp the importance of what is being presented. There are major links between ethics, law and rules and regulations. By design and practice, all are dependent on one another to ensure the highest standards possible and professional outcomes, which are fair to all parties. Ethics is an integral part of this connection. The practitioner must be of high ethical standard and character or the codes in question will not register with the individual to their fullest extent.

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When an individual joins a professional organization they accept the applicable code of ethics and rules and regulations. In Canada, a real estate practitioner may operate under several codes, including those of the Real Estate Institute of Canada (REIC), the Institute of Real Estate Management (IREM), the Canadian Real Estate Association (CREA) and the codes of any other professional organizations they belong to. Coupled to these Codes are the common law and statutory laws of this country. Just as the member in question must know the Codes of their professional associations, they must be familiar with the applicable laws, which govern real estate in this country and their own province. This is also the case for those licensed real estate practitioners who are also governed by the rules and regulations of their respective and provincial real estate boards. We will review in detail the Ethics Codes and Codes of Professional Standards of: CODE NO. 1: The Real Estate Institute of Canada CODE NO. 2: The Institute of Real Estate Management (the Code of Professional Ethics and the Code of Ethics for both the Certified Property Manager and the Accredited Residential Manager). CODE NO. 3: The Canadian Real Estate Association Code of Ethics and Standards of Business Practice.

NOTE: Based upon the individuals and/or group this course is being presented to, the instructor may add and/or substitute another Institute’s Codes and Professional Standards to the list of Codes reviewed and studied.

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7-3 CODE OF ETHICS AND PROFESSIONAL STANDARDS: COMMON LINKS As previously reviewed, most major Codes, and certainly those that govern the real estate industry have common standards and criteria. This is the case with regards to the following three Codes that we will study in detail: 1. The Real Estate Institute of Canada 2. The Institute of Real Estate Management 3. The Canadian Real Estate Association These are the key elements that you will find in most Codes of Ethics and Professional Standards: •

Pledge: A Statement of Purpose and, or pledge by the member to uphold the values and standards of the institution they are voluntarily joining.



Fiduciary Responsibility and Loyalty to Client and Firm: The member pledges to always act in the best interest of those who he works for, and with. The member will preserve, enhance and protect any property or materials they are entrusted with by their client. They will at all times respect the confidentiality of their client’s interest.



No Conflicts of Interest; Full Disclosure: The member will avoid any perceived or potential situation where the responsibility and commitment to their client may be questioned. They will disclose immediately any information to the client or employer that may impact the assignment in question, or their efforts or advice.



Fairness to All Parties: As a professional, the member will conduct themselves appropriately at all times, including all dealings with their client, third parties, and the general public.



Respect and Cooperation with other Members: The member will at all times conduct themselves with the utmost integrity, respect, and good faith when dealing with fellow members of their institute. All members will be positive reflections of the institute that they belong to.



Obtain and Safeguard Professional Designations: The member who achieves a designation from the Institute will practice to the standards expected by such a designee. They will vigorously promote and defend their designation and the Institute, which granted it and report, any case where the designation is being used unlawfully or improperly.

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Professional Skill and Expertise: The member is committed to developing their professional skill and expertise, and maintaining and exercising these standards. They will keep current on all information related to their profession. They will not accept assignments they are not qualified to do, or which they cannot devote their full attention and skill.



Fair and Disclosed Fees and Written Contracts: The member will set fees based upon their skill, expertise, reputation and market conditions. These will be fully disclosed prior to commencing the assignment. The member will request written and detailed service contracts be entered into between themselves and their client.



Conduct of Business, Ethics, and Laws: At all times the member will conduct themselves to the highest possible standard with regards to their business practices and ethics. They will respect and adhere to all applicable rules and regulations that apply to them as professionals, as well as any and all laws of all jurisdictions in which they reside in and operate from.



The Member will Cooperate and Assist in the Enforcement of their Code of Ethics and Professional Standards: The member is duty-bound to support their Codes and to report any member who does not. If called upon to participate in any disciplinary hearing, in any capacity, the member must do so in an honourable and fair manner.

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7-4 AN INTRODUCTION TO OUR CODES In this course, we are introduced to the following three professional codes: CODE NO. 1: The Real Estate Institute of Canada CODE NO. 2: The Institute of Real Estate Management (the Code of Professional Ethics and the Code of Ethics). CODE NO. 3: The Canadian Real Estate Association Code of Ethics and Standards of Business Practice.

We examine the Real Estate Institute of Canada’s Code because you are potential candidates and members of this Institute. We study the Institute of Real Estate Management Code because if you are working towards certification in property management, such as the Certified Property Manager designation (CPM), Accredited Residential Managers (ARM) or Accredited Commercial Manager (ACoM), you are bound by this Code. (And, the Real Estate Institute of Canada and the Institute of Real Estate Management are formally and legally aligned with one another). Finally, we study the Canadian Real Estate Association Code because if you are a licensed real estate Broker/Agent in Canada, you are bound by this Code. The following sections are extracted from these three Institute’s publications. All speak to the critical importance that Ethics plays in their respective organizations. All are declaring that their members are skilled, conscientious and ethical real estate professionals.

THE REAL ESTATE INSTITUTE OF CANADA (REIC) One of the most basic defining features of professionals is that they act in such a way that personal gain is never placed above the interest or good of the public. In the simplest terms, ethics is nothing more than proper behaviour. High ethical standards, however, demand that individuals look beyond self or corporate interests to the interests of others and the society as a whole, not just the avoidance of harm. Integrity, prudence, competence and cooperation are the cornerstones, with full disclosure (of personal interests and limitations on competence) as the most important way in which Members have undertaken to ensure a “level playing field” with informed participants.

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Ethics are crucial to a healthy and productive society. They rest on the concept of a shared interest – that we all have a stake and a collective responsibility in establishing a fair and equitable social system. Whenever a position is favoured without regard for the ramifications on society, or self-interest in business overshadows the needs and rights of others, the social contract is violated. When specific injury is done, the law comes into play. However, Members of the Real Estate Institute of Canada have, by their affiliation, set themselves apart as a distinct group of individuals dedicated to higher standards of business practice than the minimum standards set out in law. The Code is the written and sworn contract, which sets out these higher standards by which the members have agreed to abide. “Ethics and Business Practice” (REIC 2600) is a required course for all REIC designation Candidates. Nonetheless, the best method of teaching ethics is by example. While it is the commitment of the Institute to enforce and emphasize the Code, it is only through the exemplary behaviour of its Members that the ultimate goal of true professionalism can be achieved.

THE INSTITUTE OF REAL ESTATE MANAGEMENT (IREM) IREM was founded more than 70 years ago with ethics as its cornerstone. Since then IREM has been providing education, resources, information and membership for real estate management professionals. Members of IREM are obliged to uphold the IREM Code of Professional Ethics, thus, conducting their professional activities in accordance with the Code. IREM actively enforces the Code – violations are processed within a defined structure, including an established peer-review process, which may result in disciplinary actions. IREM has a commitment to the real estate management profession and adopted its new and revised IREM Code of Professional Ethics to strengthen requirements for ethical and competent practice. The Code protects the public, promotes competition, reflects contemporary business practices and sends a powerful message to the marketplace that IREM Members act ethically regardless of their credential or membership type. This new code because effective January 1, 2007.

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THE CANADIAN REAL ESTATE ASSOCIATION (CREA) – SEE APPENDIX A CREA’s Code of Ethics and Standards of Business Practice has been the measure of professionalism in organized real estate for over 40 years. The first code was approved in 1913 at the convention of the National Association of Real Estate Boards held in Winnipeg. Members approved the first Code of Ethics specifically prepared for members of The Canadian Real Estate Association in 1959. The Code establishes a standard of conduct, which in many respects exceeds basic legal requirements. This standard ensures that the rights and interests of consumers of real estate services are protected. As a condition of membership, all REALTORS® agree to abide by the Code. 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. A REALTORS® ethical obligations are based on moral integrity, competent service to clients and customers and dedication to the interest and welfare of the public. The Code has been amended many times to reflect changes in the real estate marketplace, the needs of property owners and the perceptions and values of society. For more than forty years, through a variety of updates, the CREA Code of Ethics is unchanged in demanding high standards of professional conduct to protect the interests of clients and customers and safeguard the rights of consumers of real estate services. Note the similarities between these three declarations. They are bold and definite statements of principles. They are meant to inspire their members and give confidence to the public. They are meant to set these organizations apart from the norm. OTHER CODES We have presented three real estate codes based upon the structure of this course and the professional and academic goals of the students. It is common practice for all professional institutions, agencies and organizations to also have Codes of Ethics and Professional Standards and Conduct. Many corporations also have their own Codes and policies and guidelines.

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7-5 ETHICS AND THE DISCIPLINARY PROCESS Professional associations, which operate under a Code of Professional Standards and Ethics, will have a clearly defined procedure for dealing with complaints against its respective members. Complaints filed can either be member against member, or a third party claim against a member. This ensures that the public and the members have an opportunity, should it arise in which to both make a claim of professional misconduct and to defend against such charges. It is imperative that members of professional organizations know how their association administers the complaint and disciplinary process.

REAL ESTATE INSTITUTE OF CANADA (REIC) The following is a general outline of how REIC deals with such matters.

Complaint Received •Copy of Handbook sent to Complainant •Respondent Notified

Professional Standards Committee •Reviews for Merit •Dismisses or appoints Researcher

Researcher

•Investigates complaint and reports back to PSC •PSC Dismisses or Charges Respondent

Hearing Panel

•Hears the evidence •Renders decision •Recommends any Discipline to PSC

Professional Standards Appeal Board •Reviews Hearing •Renders decision or another Hearing

… Final Verdict Reached Before a final verdict is reached, the complaint will be addressed in the following sequence, with each committee or board having a specific mandate and set of responsibilities. Each of these committees or boards will generally be a combination of members and staff with professional assistance as required. REIC 2600 Ethics and Business Practice

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1.

COMPLAINT RECEIVED -

2.

REIC Staff and applicable Committee investigate complaints received from third parties. Initiates independent investigations (outside professional assistance may be utilized) Determine whether there is reasonable cause to believe that a violation of the applicable code of ethics has occurred, and, if so, forward complaint for hearing. If no violation, the matter is dismissed. PROFESSIONAL STANDARDS COMMITTEE

-

3.

Generally, a Committee of the Member’s peers. Determine whether the applicable code of ethics was violated. If so, determines disciplinary action ▪ Reprimand ▪ Letter of censure ▪ Other ▪ Suspension (duration based upon degree of violation) ▪ Another form of penalty such as fine plus hearing cost; compelled to upgrade education and/or professional development ▪ Expulsion RESEARCHER

-

4.

Investigates the complaint and reports back to the Professional Standards Committee. The Professional Standards Committee either dismisses or charges the respondent.

HEARING PANEL -

5.

Hears the evidence Renders a decision Recommends any discipline to the Professional Standards Committee. ▪ Uphold original decision ▪ Modify original decision in some way ▪ Reverse original decision ▪ Send back for re-hearing PROFESSIONAL STANDARDS APPEAL BOARD

-

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Reviews the hearing Renders a decision or recommends another hearing

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INSTITUTE OF REAL ESTATE MANAGEMENT (IREM) The following is a general outline of how IREM deals with such matters. ETHICS AND DISCIPLINE COMMITTEE

BOARD OF ETHICAL INQUIRY

ETHICS HEARING AND DISCIPLINE BOARD

ETHICS APPEAL BOARD

1. BOARD OF ETHICAL INQUIRY -

Reviews all complaints and investigates the allegations Determines if there’s reasonable cause to believe that the IREM Code was violated Forwards the case to the Hearing and Discipline Board

2. HEARING AND DISCIPLINE BOARD -

Weighs the evidence and testimony presented, applies the Code to the facts and determines if a Code violation has occurred Hands down appropriate disciplinary action

3. APPEAL BOARD -

Hears the appeals of decisions reached by the Hearing Board May adopt, reject or modify the decision of the Hearing Board or send the dispute back to the Hearing Board

POSSIBLE DISCIPLINARY ACTIONS 1. LETTER OF CENSURE -

Published (appears in Journal of Property Management and www.irem.org) Unpublished

2. SUSPENSION OF MEMBERSHIP -

From a period of one month, up to three years Always published

3. TERMINATION OF MEMBERSHIP -

Always published

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7-6 BOARD OF DIRECTORS: ETHICS, ACCOUNTABILITY AND RESPONSIBILITY In the course of your professional and personal lives, you may be asked from time to time to volunteer or stand for election as a Board of Directors for a professional or community organization. Being asked to consider serving as a Director or Trustee should be considered a significant honour, and confirmation that your presence, expertise, and reputation have been noted by others. As with any great responsibility, so comes accountability. This is especially true as corporate governance and the role and actions of Boards of Directors and individual Directors have increasingly been scrutinized as a result of a significant rise in malfeasance, incompetence, indifference and even criminal activity by Boards. Before contemplating serving on a Board, it is your own personal responsibility to ask yourself the following fundamental questions with regard to this request as well as what role you may be able to play should you volunteer your service, and/or serve on a Board which may have some form of remuneration; ✓ Why have I been asked to serve? ✓ What do I know about the organization involved? ✓ Is the organization sound legally, financially, and with regards to its operations, staff, and resources? ✓ Do I support the goals of the organization and can I make a significant contribution to them by serving as a Director or Trustee? ✓ Am I qualified to serve as a Director of the organization in question? ✓ What are the commitments with regard to my time as it relates to my personal and professional activities? Will I be asked to contribute other resources other than my time, expertise and commitment? ✓ What are my legal responsibilities and liabilities if I serve? ✓ Does service on this Board enhance my reputation as well as providing additional experiences that will benefit me?

You therefore must do some preliminary research before committing to serve on a Board. Review the organization in detail, especially its finances and activities. Know who the other Directors are, and who the staff and how they operate. Be sure that this service is the right thing for you to do at the particular time you are being asked to consider this matter.

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Of special note should be for those who are asked to serve as part of the professional organizations they belong to which oversee their professional activities and designations, such as the Real Estate Institute of Canada and either its local chapters or National Board. A professional association can only be as strong as its membership, its structure, and its leadership. If you have benefited from your association with a professional body, you too should be prepared to contribute back to this same organization. When you serve on a Board of Directors you will be responsible for the well-being of this organization and you will have a fiduciary duty to the membership and all those who are connected to it. Amongst your responsibilities (as an individual Director and the Board as a whole) will be the following: ❖ Setting the direction of the organization and implementing any strategic planning that has been drafted, reviewed and approved. ❖ Ensuring that the organization and the staff have the necessary resources to conduct the business of the association. ❖ Provide guidance and assistance to the best of your ability to the staff. When asked to evaluate the staff, do so in a professional and unbiased manner. ❖ Providing oversight for the organization’s operations including working closely and monitoring the performance and the results of the professional staff which has been hired to run the organization on a day to day basis. It is critical that both the professional staff and the volunteer Board work together for the well-being of the entire organization. Mutual respect is essential. ❖ Ensure that the Board operates in a professional and clear and decisive manner, in accordance with their mandates, Code of Conduct and Ethics, and always in the best interest of the association. The Board and its Directors will at all times avoid any potential perceived or actual conflict of interest. The Board will also work diligently to have an ongoing succession plan so that professional and well-qualified members succeed them on the Board. This section has provided a brief overview of the responsibility of individual Directors and Boards of Directors entrusted with the well-being of their association. A committed and ethical professional, by serving in some capacity on a Board of Directors or committee is contributing back to their profession.

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7-7 IN-CLASS ASSIGNMENT #1 – BOARD OF DIRECTORS AND MEMBER DISCIPLINE Have you ever served on a Board of Directors? □ yes □ no 1.

If yes, for which organization and what was its purpose? __________________________________________________________ __________________________________________________________

2.

If yes, where were you recruited to serve? Why were you asked to serve? (If you have not yet served, why do you think you will be asked to serve?) __________________________________________________________ __________________________________________________________

3.

Are you prepared to serve on a Board associated with your real estate profession? (If asked) □ Yes (I will seek an appointment) □ No (at this time) □ No

4.

What skills, qualities and resources will you be able to contribute to this Board? __________________________________________________________ __________________________________________________________

5.

Would you serve on a Disciplinary Committee? □ yes

6.

□ no

□ not sure

□ only if compelled to serve

Do you believe professional discipline should be? □ An opportunity to re-educate □ A process to punish

7.

□ A process to terminate

Do you believe that the Disciplinary Process, as outlined in this Section is?

□ not strict enough

□ fair and balanced

□ strict enough

Why? _____________________________________________________ __________________________________________________________

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7-8 CONCLUSION – KEY POINTS 1.

You must know, understand, and conduct yourself in accordance with these Codes of Ethics and Business Standards.

2.

There can be no excuse for not knowing the Codes in which your professional membership operates under. Neither your peers, the public, nor the courts will accept any excuse or reason why you, the qualified professional deviated from these standards.

3.

Each of the three organizations whose Codes are profiled begins with information on the organization itself. Understanding how and why this professional organization was formed assists with the understanding of their respective Codes.

4.

You will also note when reviewing these Codes that there is considerable similarity in their scope and articles. This repetition highlights the most important ethical and practice standards expected.

5.

You will be bound by these codes. They are your guidelines. They are the public’s assurance that you the practitioner adhere to professionalism and good ethics.

KEY POINTS: ETHICS AND THE DISCIPLINARY PROCESS 1.

Professional associations will have a disciplinary process clearly defined. This process will be based upon the association’s Code of Ethics and Professional Standards and these will be the standard by which the members conduct in question will be judged.

2.

The Institute of Real Estate Management has a committee that oversees ethics and discipline, and which is supplemented by a three-step investigative and judgment process. a. A Board of Ethical Enquiry which reviews the initial complaint. b. An Ethics Hearing and Discipline Board to conduct a hearing, should one be warranted. c. An Ethics Appeal Board where the judgment can be reviewed by the member who was found in breach.

3.

As with most committees within an association, ethics and discipline boards are comprised of members themselves. This is a tremendous responsibility for those asked to serve or whose service is requested. You are effectively judging the performance of your peers. Your responsibility, therefore, is first and foremost to ensure that your association’s Code of Ethics and Professional Standards was adhered to and that any conduct which is detrimental to your profession and association is effectively and fairly dealt with and if warranted, appropriate penalties dispensed.

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4.

Complaints generally fall into two categories: Member complaint against Member; a third-party complaint against a Member.

5.

Any complaint by a member against another member is a very serious matter. It will likely involve both members’ firms. The entire industry is under scrutiny when such actions occur. Often these matters can be solved by settlement or arbitration in advance of a formal hearing. If the matter does go to a hearing, the professional conduct and competence of both parties will be examined.

6.

When a member of the public files a complaint against a professional member, it is the member who has the responsibility of defending their actions. They will be deemed the professional and their level of competence and performance will be at stake.

7.

In addition to launching complaints to an association’s Ethics and Discipline Committee, the complainant will also have the right to seek redress through the court system.

KEY POINTS: BOARDS OF DIRECTORS 1. If asked to join an association, and or serve on its Board of Directors, study the association first, including its Constitution, Bylaws, Codes and Financials; know what you are joining and who you will be associating with. 2. Service on a Board of Directors you respect is an honour. It means you have been recognized as someone whose skill, expertise, leadership and reputation can contribute significantly to the governance of your association.

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REIC 2600

CHAPTER EIGHT

GOALS AND OBJECTIVES: Chapter eight explores topics including: fiduciary duty, the pillars of agency, duties to third parties, avoiding controversy and complaints, and professional courtesy. In addition, we will examine the REIC professional standards handbook and how to manage relations with the institute and fellow members.

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CHAPTER EIGHT – TABLE OF CONTENTS PROFESSIONAL STANDARDS AND CODES OF ETHICS 8-1 PROFESSIONAL STANDARDS AND CODES OF ETHICS ......................................................... 139 8-2 PROFESSIONAL STANDARDS HANDBOOK .......................................................................... 144 8-3 FIDUCIARY DUTY AND RESPONSIBILITY .............................................................................. 145 8-4 THE PILLARS OF AGENCY AND DUTIES TO THIRD PARTIES ................................................. 147 8-5 RELATIONS WITH YOUR INSTITUTE, CHAPTERS AND BOARDS ........................................... 150 8-6 RELATIONS WITH YOUR FELLOW MEMBERS ...................................................................... 151 8-7 PROFESSIONAL COURTESY ................................................................................................. 152 8-8 AVOIDING CONTROVERSY AND COMPLAINTS ................................................................... 153 8-9 CONCLUSION – KEY POINTS ............................................................................................... 156

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8-1 PROFESSIONAL STANDARDS AND CODES OF ETHICS Professional organizations will generally combine a Code of Ethics with Professional Standards. Together they form the Institute or organization’s statement of principles, and declaration of who they are, what they do, and how they will act. The Code and the Professional Standards will bind professionals when they become a member (candidate or full member); they voluntarily accept the Code and Standards. They pledge to exercise their professional obligations and delivery of service in accordance with these declarations and policies. By accepting such conditions, a member waives the excuse of “not knowing what was expected of them”. An organization’s Code of Ethics and Professional Standards are both your guidelines, but also your clients and the public and your fellow members guarantee of quality and service. Highlighting these standards should be part of the professional’s promotion and presentation. If you have earned the right of membership, and a designation, you have set yourself apart. Be proud of this. Finally, when you review the Code of Ethics and Professional Standards, keep in mind that each and every word and every statement and article is the result of years of careful consideration and refinement. Every word has, and serves a purpose. Every word translates into action. The Real Estate Institute of Canada has seventeen Articles to its Code of Professional Standards. (These are similar in content and intent to other professional real estate associations). These articles are concise and definite statements of principle.

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THE CODE OF PROFESSIONAL STANDARDS OF THE REAL ESTATE INSTITUTE OF CANADA

ARTICLE 1 - Quality of Service A Member will perform professional services with competence, integrity and due regard for the public interest. ARTICLE 2 - Well Informed and Knowledgeable A Member will maintain a high standard of professional expertise. ARTICLE 3 - Full Disclosure to Client A Member will be forthright and impartial when advising a client, and will not withhold any information relevant to the interests of a client. ARTICLE 4 - Care of Property A Member will care for the property of others entrusted to the Member in the same manner that a careful and prudent owner would care for similar property. ARTICLE 5 - Fairness to all Parties A Member will at all times protect and promote the interests of a client, but will be fair and honest with all other parties involved in any matter. ARTICLE 6 - Referral When Lacking Competence A Member will neither advise nor render service in areas or matters which exceed the Member's competence. The Member will endeavour to direct parties to those from whom competent advice and service may be obtained. ARTICLE 7 - Representing Divergent Interests A Member will neither advise nor represent parties having divergent or conflicting interests without the informed consent of all parties. ARTICLE 8 - Conflict of Interest between Client and Member A Member will not: a) Enter into a business transaction with a party to whom professional advice has been given by the Member if there is a significant risk that the interests of the Member and the client may differ; or b) Provide advice to a party when the personal interests of the Member, a relative or an associate are in conflict with the interests of the party, without advising the party that independent advice should be obtained and securing a written acknowledgement of same from the party. 140

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ARTICLE 9 - Disclosure of Fees A Member will not receive directly or indirectly any rebate, fee, commission, discount or other benefit, whether monetary or otherwise without the full knowledge and prior consent of the client. ARTICLE 10 - Fair and Reasonable Fees A Member will charge fair and reasonable fees commensurate with services being provided and fully disclose the amount of such fees at the time the service is provided. ARTICLE 11 - Confidential Information A Member will hold in strict confidence all information provided in confidence by a client, unless required by law to disclose such information. ARTICLE 12 - Outside Interests A Member who engages in another profession, business or occupation beyond the usual scope of services provided to clients must not allow such outside interest to jeopardize the Member's professional integrity, independence or competence. ARTICLE 13 - Advertising All advertising placed by a Member, whether on the Member's behalf or on behalf of a client, will provide accurate information regarding the subject of the advertisement, and will not be false or misleading in any respect. ARTICLE 14 - Use of Designations A Member will not use a designation or accreditation granted by the Institute in any manner contrary to this Code of Professional Standards or the By-laws of the Institute. ARTICLE 15 - Other Institute Members A Member will not make, authorize, or otherwise encourage any unfounded oral or written statements that are derogatory to, or disparaging of, another Member’s business practice. All dealings between Members will be conducted with integrity and good faith. ARTICLE 16 - Laws and the Conduct of Business A Member will conduct business in strict accordance with all applicable laws, by-laws and regulations, and in accordance with any Code of Professional Standards enacted by the Institute for any of its Councils. ARTICLE 17 - Member Co-operation in Enforcing the Code A Member will assist and fully co-operate in the enforcement of the Code of Professional Standards and the resolution of any matter brought before the Professional Standards Committee. REIC 2600 Ethics and Business Practice

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When reading these articles individually, and collectively, there can be no doubt what the purpose is to the reader and member. Therefore, no excuse is acceptable for contravening them. You are honour bound to adhere to your Code of Ethics and Professional Standards. The following is extracted from the Real Estate Institute of Canada’s Professional Standards Handbook (September 2009).

“One of the most basic defining features of professionals is that they act in such a way that personal gain is never placed above the interest or good of the public. In the simplest terms, ethics is nothing more than proper behaviour. High ethical standards, however, demand that individuals look beyond self or corporate interest to the interests of others and the society as a whole, not just the avoidance of harm. Integrity, prudence, competence and cooperation are the cornerstones, with full disclosure (of personal interests and limitations on competence) as the most important way in which Members have undertaken to ensure a “level playing field” with informed participants. Ethics are crucial to a healthy and productive society. They rest on the concept of a shared interest – that we all have a stake and a collective responsibility in establishing a fair and equitable social system. Whenever a position is favoured without regard for the ramifications on society, or self-interest in business overshadows the needs and rights of others, the social contract is violated. When specific injury is done, the law comes into play. However, Members of the Real Estate Institute of Canada have, by their affiliation, set themselves apart as a distinct group of individuals dedicated to higher standards of business practice than the minimum standards set out in the law. The Code is the written and sworn contract, which sets out these higher standards by which the Members have agreed to abide”.

“Ethics and Business Practice” (REIC 2600) is a required course for all REIC designation Candidates. Nonetheless, the best method of teaching ethics is by example. While it is the commitment of the Institute to enforce and emphasize the Code, it is only through the exemplary behaviour of its Members that the ultimate goal of true professionalism can be achieved.

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As we review professional standards, we will focus on the following components: • • • • • • •

Professional Standards Handbook Fiduciary Duty and Responsibility The Pillars of Agency and Duties to Third Parties Relations with your Institute, Chapters and Boards Relations with your Fellow Members Professional Courtesy Avoiding Controversy and Complaints

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8-2 PROFESSIONAL STANDARDS HANDBOOK To ensure compliance with an organization’s Code of Ethics, they draft an implement a Professional Standards Handbook, which provides the members with further guidelines on how to conduct themselves and their business practices, and which are meant to provide reassurance and quality assurance to their clients and the general public. The Code of Ethics and the professional standards must be treated as one. They are carefully prepared to eliminate any uncertainty or doubt by the member. While REIC’s Code of Ethics is a brief seventeen articles, their Professional Standards Handbook contains thirty-one pages of detailed guidelines, policies and procedures. The following is taken from Section 2 of this Handbook, the purpose of this handbook. This handbook has been designed for four reasons: 1. To make the Code a more understandable and usable document; 2. to provide practical direction to the Members in the interpretation of the Code; 3. to describe clearly the procedures involved in enforcing the Code; 4. To emphasize the fundamental role of the Code and its importance to the Institute.

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8-3 FIDUCIARY DUTY AND RESPONSIBILITY As professionals working in a regulated industry, we real estate practitioners are bound by fiduciary duties and responsibilities to our principal. This is a duty of care standard. The word fiduciary refers to trust. (The word is derived from the Latin word fiduciarius or “trust”). Our fiduciary obligations are specific and unalterable. The following are the key components of our fiduciary duty and responsibility. CARE AND DUE DILIGENCE ✓ You must perform all responsibilities with reasonable skill and expertise. ✓ You do not undertake tasks that you do not have the experience and knowledge to carry out. You are always current and knowledgeable about your market and services. CONFIDENTIALITY ✓ You must keep your client’s information confidential at all times. ✓ Without specific authority to release information, you must not without exception. FULL ACCOUNTING ✓ You must provide a full accounting of all financial arrangements concerning the transaction. ✓ Your client’s accounts are safe and designated. FULL DISCLOSURE ✓ You must disclose to the client all facts that are known or should have been known by you, the professional. LOYALTY ✓ You have the duty to always act in the best interest of your client. ✓ Never place your own interest or that of any other person above those of your client. ✓ This is the cornerstone of one’s fiduciary obligation. OBEDIENCE ✓ You must follow your client’s instructions. This obligation does not include instructions which violate legal statutes or your Codes. ✓ If you cannot in good conscience be obedient, you cannot serve them.

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OTHER DUTIES OWED TO CLIENTS ✓ In addition to your fiduciary duties, other duties are owed to clients including: ✓ Obeying the law; avoiding conflicts of interest and fraud; avoiding unethical fees; providing a skilled and conscientious service; being fair and respectful to third parties; and providing full and accurate reporting.

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8-4 THE PILLARS OF AGENCY AND DUTIES TO THIRD PARTIES With the responsibility entrusted to the real estate professional comes accountability. The real estate professional is most often involved in common law, contract law and agency law. They must know the Real Estate Act of their respective jurisdiction, as well as civil and corporate law which will affect the conduct of business where they work. (It is always prudent to have the services of competent legal and accounting services to support your own practice). You must remain current in your discipline. The term agency describes the relationship where one party (“principal”) consents to another party (“agent”) acting on the principal’s behalf. In the real estate profession, the principals are buyers and the sellers and the agents are the brokerages and REALTORS® that represent them. If you agree to become someone’s agent, you accept significant duties and obligations. It is essential that an agent know what these obligations are to be qualified to carry them out. The Supreme Court of Canada has determined that relationships such as agency relationships include fiduciary obligations. Fiduciary obligations include the basic duties of loyalty, confidentiality and disclosure. An agent with fiduciary obligations must always put the interests of their principal above their own and those of other parties. This is the law and it is your duty. Canadian courts have consistently classified the relationships between brokerages, REALTORS® and real estate professionals and their clients as agency relationships carrying with them fiduciary obligations. Therefore, always assume you are held to this standard, and that your conduct and performance must never be lowered, but always be to the highest of standards. The concept of agency involves our relationship with our client. Once we are contractually committed to this agency relationship, we owe our client what is referred to as the Four Pillars of Agency: Obedience, Competence, Good Faith and Full Disclosure, and Full and Complete Accounting of Funds and Financial Activities. These Four Pillars cannot be altered. They define both the legal concept of agency, as well as the standard of care owed to our principal.

In addition to these Four Pillars of Agency, the professional also must provide a duty of care to third parties. In dealing with third parties, the professional owes them three primary duties: Honesty, Fairness and a Duty of Care. Therefore, a professional is responsible not only to his client or principal but third party contacts as well. REIC 2600 Ethics and Business Practice

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THE PILLARS OF AGENCY

DUTIES TO 3RD PARTIES

1.

OBEDIENCE • Lawful Instruction • Interest of Principal • Concept

∙ HONESTY ∙ FAIRNESS ∙ DUTY OF CARE

2.

COMPETENCE • Well informed • Conscientious • Skillful

3.

GOOD FAITH/FULL DISCLOSURE • Conflict of Interest • Disclose to any Personal Involvement • Confidentiality

4.

ACCOUNTING • Accurate Records • Accounting Funds Held

It is important to establish at the beginning of your relationship with your client(s) what type of agency relationship you are engaging in. This is especially the case with regard to the conduct of residential real estate in Canada. Agency and residential real estate transactions have evolved. While the guiding principles of agency remain constant, what has evolved in recent years are several forms of agency that reflect the contractual relationship between the professional and the client. TYPES OF AGENCY Basic common law duties that an agent owes to their principal are consistent. An agency relationship may be created by a written agreement, oral agreement, or by conduct. In real estate, especially residential sales, there can be a variety of agency relationships. SINGLE AGENCY – REPRESENTING THE SELLER The most common form of agency in the real estate context is where a listing brokerage acts solely for a seller. When in effect, the statutory requirements surrounding that relationship and the modifications found in the standard Multiple Listing Contract to the listing brokerage’s general common law duties of loyalty, disclosure and confidentiality are in effect.

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SINGLE AGENCY – REPRESENTING THE BUYER Buyer’s agency became common practice throughout the real estate profession in 1994. In these instances, the Agent is engaged by the buyer. NO AGENCY REPRESENTATION On occasion, one or more parties to a real estate transaction are not represented by a licensed professional. The recovery of remuneration from unrepresented third parties, particularly sellers who are marketing their property on a “for sale by owner basis”, should be agreed to by the parties, as well as other basic terms and conditions – before transactions are concluded. LIMITED DUAL AGENCY A brokerage or REALTOR® cannot act for competing parties in the same transaction. The only exception to this is with the informed consent of both the buyer and the seller. In these cases, the concept and application of limited dual agency is in effect. Limited Dual Agency Agreements must be signed by the seller, buyer and brokerage and its modification of the agency duties of the brokerage and REALTOR®. In summary, the concept and practice of Agency are prevalent in the real estate industry. It means we have legal obligations as well. The courts have determined that the real estate professional is indeed a professional and that this implies higher standards and conscientious action. Finally, remember at all times that the governance of real estate in Canada is a provincial matter. You must know your province’s Real Estate Act.

REMEMBER: In Canada it is the individual provinces that govern and administer their respective Real Estate Acts and the licensing and activities and practices of REALTORS®. Therefore, it is your responsibility to know your province’s Real Estate Act and any and all provisions governing your responsibility and professional standards, and what types of Agency Agreements and relationships are permitted.

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8-5 RELATIONS WITH YOUR INSTITUTE, CHAPTERS AND BOARDS Your membership and participation with your Institute, its Chapters and Boards is a voluntary association. On your own free will you have made the decision to affiliate yourself with the goals and objectives of your institute and have pledged to adhere to its Code of Ethics and Professional Standards. For a professional organization to succeed, especially one with provincial, national or international reach, its membership must be active and participate to the best of their ability. The organization will only function if the membership is active and engaged. Your national institute has a specific structure that has been created to serve the membership nationwide, and support individual chapters and its membership. The members and chapters in return are to support the national organization including its Board of Directors and head office staff. Local chapters have been created for the purpose of membership education, networking, study of local markets and the advancement and objectives of the organization. Local boards have a similar mandate and are the first level of the organization. It is from the local chapters and boards which future leaders first emerge and rise to higher levels of service. The Real Estate Institute of Canada has identified the key duties of its chapters to: ✓ Organize, co-operate with others in organizing, or identify local educational programs to expand membership awareness of current issues and appropriate standards of business practice; ✓ Actively promote and cooperate in organizing any national or regional Institute education programs relating to professional standards; ✓ Assist, upon request, the Executive Director, Committee Liaison, the Board of Directors or any Committee, Panel or Appeal Board involved in the resolution of a professional standards complaint, and to support the chapter and the Institute as required for the advancement of the profession.

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8-6 RELATIONS WITH YOUR FELLOW MEMBERS The following is from the Real Estate Institute of Canada’s Professional Standards Handbook (Section VII and VIII) and is entitled the Fundamental Responsibility of Every Member. (Similar articles are in most codes). THE FUNDAMENTAL RESPONSIBILITY OF EVERY MEMBER This Handbook for the Code of Professional Standards is a reaffirmation of the Institute's commitment to high ethical standards. Members are given the right to use designations awarded by REIC, and this right is contingent upon continued membership in the Institute. The value of any designation is directly tied to the reputation and skill of the user. It is incumbent upon the Institute to ensure that such users fully subscribe to the Code. An unethical practice is not only a violation of the public trust; it is an offence against all Members of the Institute. Professional organizations succeed or fail based upon the public perception of their members' skills and standards. The Institute sets criteria for membership and, in granting designations, is establishing a level of competence acceptable for individual practitioners participating in REIC. It is the obligation of the Institute and every individual Member to be vigilant in ensuring that all REIC Members meet the minimum standards of the Code and that violations are promptly brought to the attention of the Professional Standards Committee. The fundamental duty of every Member is the maintenance and promotion of the Institute's Code of Professional Standards in order to ensure that the credibility of REIC, its designations and its Members are never compromised. DUTIES OF MEMBERSHIP All Members are required to comply with the Code of Professional Standards and are also urged to participate in its enforcement. When circumstances warrant, Members should, after careful consideration, use the procedures outlined to file complaints in writing with the Professional Standards Committee. It is only with the ongoing vigilance of all Members that the Institute's standards will be maintained. Members in good standing are expected to promote and defend their organization. They are to be courteous and supportive of their fellow members and work together for the common good of their Institute and their profession.

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8-7 PROFESSIONAL COURTESY Professional standards by their very nature should reflect common sense and professional courtesy. Professional courtesy should, and is expected from your fellow members, and should be extended in return. Basic professional courtesy is neither difficult, onerous, or should it be questioned. Refer to the Codes of Ethics and Pledges we have reviewed. All have an article referring to one’s conduct with fellow members. For example, Article 15 “Other Institute Members” of the Real Estate Institute of Canada Code states: A Member will not make, authorize, or otherwise encourage any unfounded oral or written statements that are derogatory to, or disparaging of, another Member’s business practice. All dealings between Members will be conducted with integrity and good faith. Basic professional courtesy includes, but is not limited to, the following straightforward approaches to good business practices: ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪

Always be courteous, professional, and businesslike in all business communications, meetings and presentations. Be factual and don’t exaggerate. Be punctual for meetings and in reply. Advise the other party if you are to be delayed. Be prepared for meetings and appointments. Respect the other party’s time. Respect the rule of agency and your employer and client’s rights. Respect the terms and conditions of contracts (yours and other parties). Keep detailed and professional business notes and files. Return phone calls promptly and professionally. Follow the conditions or instructions, which you are bound by. Keep your employer or supervisor informed of your actions. Adhere to your Code of Ethics and Professional Standards at all times – without exception or excuse.

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8-8 AVOIDING CONTROVERSY AND COMPLAINTS With so many people and companies involved in the real estate industry and related businesses, it is inevitable that there will be disputes, controversies, complaints made against members to Institutes, Associations and Boards, and on occasion Court action taken against practitioners. Therefore, it is incumbent on the true real estate professional to avoid whenever possible any possibility of such actions being taken against themselves, their employer, and clients. By being organized and proactive and adhering to one’s Code of Ethics and Professional Standards, you significantly lessen the opportunity for controversy and complaints made against you. The following are practical ways to avoid controversy and complaints and are to be noted in the context of this course material. Solid ethics and good and proper business practices are always your best defense against controversy. ❖ Know your Code of Ethics and Professional Standards. Put these into practice. This will always be your best course of action and defense against improper behaviour. Also, study your Code of Ethics and practice very carefully. These have been prepared with great attention to how one conducts themselves, but also what to be aware of with regards to potential controversies. Each of the articles highlights an area to be on guard for. You are therefore being provided with an ethical road map. ❖ Remember that the Courts have determined you are a professional. Just as you will have used your Code of Ethics and Professional Standards to promote your business interests and your own qualifications and actions, they may be used against you should you be in violation or breach. There is no defense to not knowing your Code and Standards. ❖ Understand and practice with diligence your fiduciary duty and responsibility to your client and those you serve. Remember that fiduciary duty incorporates the following: o Care and Due Diligence o Confidentiality o Full Accounting o Full Disclosure o Loyalty o Obedience o Other Duties Owed to Clients ❖ Remember also that real estate professionals often engage in an agency relationship with their clients. The Pillars of Agency and the Duties to Third Parties must be adhered to. These are: o Obedience o Competence o Good Faith/Full Disclosure o Accounting o Duties to 3rd Parties: Honesty, Fairness, Duty of Care REIC 2600 Ethics and Business Practice

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❖ Understand and practice good relationships with your Institute, its Chapters and Boards. Be an active participant within your organization. Know your fellow members. Serve whenever possible and whenever your abilities are needed in some capacity within these organizations. ❖ Know the fundamental responsibilities of a member and the corresponding duties of membership within your organization. Put into practice this knowledge. Be at all times respectful and professional with your fellow members. If you have any negative feelings towards a certain member(s), then avoid circumstances and activities, which put you into conflict with those members, you choose not to associate with. While it is not important that you have friendships with all members, it is expected that you will be courteous and professional with all. ❖ Practice professional courtesy each and every day. Follow the practical advice and actions contained within this section with regard to ongoing professional courtesy. ❖ Be precise and accurate in your record-keeping and your documentation and drafting of correspondence and agreements. Real estate is a precise business. As a professional, there is no excuse not to be able to clearly prepare agreements and presentations. Several problems between members and the public could be avoided by simply taking the time and making the effort to be accurate, concise, and professional in your recordkeeping, documentation and written contracts and agreements. ❖ Real estate involves transactions that involve funds and other security and collateral. You must prudently preserve and protect assets and monies. You must disclose and provide full and complete accounting on how funds are handled, transferred and applied. Trust accounts are exactly what they state. ❖ Keep your employer fully informed of your actions and activities. Rely on their assistance and seek their advice should you have any concerns or questions. Your professional association will also be able to provide you with resources, practice standards, and other assistance should you require detailed explanations concerning your practice and specific information that may arise on a particular file or project. Use these guides and resources prudently. ❖ At all times when dealing with another Member, especially if it regards fees and/or commissions and expenses, discuss these matters well ahead of time and upon agreement put your understanding into writing and have both parties sign off on the agreement. Fees over commissions and remuneration are prevalent in real estate. Avoid disputes that could be avoided by being proactive at the beginning of the process. The same applies to your fee or commission structure with your client. Make sure you have full disclosure, that your fees are fair and reasonable, and that your fee structure is contained within a written agreement between the parties.

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❖ If a dispute arises between members, they are bound to follow the policies and procedures contained within their Code of Ethics and Professional Standards. Honour this obligation and to the best of your ability, truthfully and accurately participate in the proceedings. In the event of disagreement, there is an arbitration procedure that can be used to settle disputes; respect this process and its outcomes. ❖ At all times you are representing your profession and your Institution, Organization or Board in the eyes of the public. Be respectful of the history and the reputation of these organizations. Should controversy or complaints arise with regards to your actions, commit your best efforts to mitigate the negative consequences and have these matters settled fairly, equitably, and in a timely fashion. ❖ Professional organizations have a dispute process and a punishment process. If you are deemed to have breached your Code and Standards, and this is upheld in an appeal process (if applicable), you must be prepared to accept these consequences – and avoid a similar fate in the future. ❖ Avoiding controversy and complaints is an ongoing requirement for those involved in the real estate profession. As a professional member, one who is either licensed or accredited (or in the process of being so), the public and your fellow members have an expectation that you will avoid disputes and ethical or legal controversies and be examples of the best our industry has to offer.

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8-9 CONCLUSION – KEY POINTS 1.

In addition to a Code of Ethics, professional organizations will also have Professional Standards. These professional standards are a guideline for the member, the client and the public on how the organization and its members will conduct themselves in the execution of their professional responsibilities.

2.

The Real Estate Institute of Canada, the Institute of Real Estate Management and the Canadian Real Estate Association all have professional standards which supplement and support their Code of Ethics.

3.

A professional member of these Institutes and Associations has no excuse with regards to their conduct or actions. Their Code of Ethics and professional standards are explicit and detailed. If a member is in doubt about any matter associated with their professional activities, they are always able to refer to the Code of Ethics and Professional Standards and the association or Institute itself.

4.

Fiduciary Duty and Responsibility are integral parts of real estate and business activity. This is especially true in real estate. Fiduciary duty includes: ✓ Care and Due Diligence ✓ Confidentiality ✓ Full Accounting ✓ Full Disclosure ✓ Loyalty ✓ Obedience ✓ Other Duties Owed to Clients

5.

The Pillars of Agency must be known by real estate professionals. This includes how and when REALTORS® or agents represent clients and their obligations to third parties.

6.

Professional standards also instruct the member how they are to associate and relate to and with their national board and local chapters and boards, as well as their fellow members.

7.

Professional courtesy and common sense are expected and must be applied.

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REIC 2600

CHAPTER NINE

GOALS AND OBJECTIVES: Chapter nine focuses on exploring the ethical practices of the Real Estate Institute of Canada (REIC).

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CHAPTER NINE – TABLE OF CONTENTS REIC CODES OF ETHICS & CODES OF PROFESSIONAL CONDUCT AND STANDARDS 9-1 ABOUT THE REAL ESTATE INSTITUTE OF CANADA ..................................................................... 161 9-2 THE CODE OF PROFESSIONAL STANDARDS OF THE REIC ............................................................ 162 9-3 KEY PRINCIPLES OF THE REIC CODE OF PROFESSIONAL STANDARDS ........................................... 162 9-4 REIC PROFESSIONAL DESIGNATIONS ........................................................................................ 167 9-5 IN-CLASS ASSIGNMENT #1 ...................................................................................................... 168 9-6 CONCLUSION – KEY POINTS ................................................................................................... 169

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9-1 ABOUT THE REAL ESTATE INSTITUTE OF CANADA WHO WE ARE: A leader in advanced real estate education, the Real Estate Institute of Canada (REIC) is an association of professionals that has been educating and certifying specialists in real estate since 1955. REIC represents an unsurpassed level of experience, commitment and dedication to real estate in Canada and, as such, is strictly governed by the Institute's Code of Professional Standards to ensure that the Institute's values are upheld for both its members and the consumer. From intense and relevant education to the leading industry designations, all of REIC's programs serve its mission. CORE VALUES: We believe: ✓ That good management translates into value and that well-managed properties improve the quality of life for people who live, work and shop in them; ✓ In professional ethics; ✓ In the power of knowledge...and the importance of sharing it. ENVISIONED FUTURE: The Real Estate Institute of Canada is the pre-eminent national association of Real Estate professionals.

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9-2 THE CODE OF PROFESSIONAL STANDARDS OF THE REAL ESTATE INSTITUTE OF CANADA ARTICLE 1. "Quality of Service" A Member will perform professional services with competence, integrity, knowledge and highest regard for the client and public interest. ARTICLE 2. "Well Informed and Knowledgeable" A Member will be current with industry competency requirements and demonstrate the highest standard of professional expertise at all times. ARTICLE 3. "Full Disclosure and Duty to Client" A Member will be forthright and impartial when advising a Client. A Member will not withhold any information relevant to the interests of a Client and will fulfill their fiduciary duty to obtain and ascertain material information that may impact or could be of interest to the Client. ARTICLE 4. "Care of Property" A Member will care for the property of others entrusted to the Member in the same manner that a careful and prudent owner would care for similar property. ARTICLE 5. "Fairness to all Parties" A Member will at all times protect and promote the best interests of a Client, but at the same time will be fair and honest with all other involved parties, and will not misrepresent in any manner. ARTICLE 6. "Referral When Lacking Competence" A Member will neither advise nor render service in areas or matters which exceed the Member's competence. The Member will endeavour to direct parties to those from whom competent advice and service may be obtained. ARTICLE 7. "Representing Divergent Interests" A Member will neither advise nor represent parties having divergent or conflicting interests without the informed consent of all parties.

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ARTICLE 8. "Conflict of Interest Between Client and Member" Member will not: a) enter into a business transaction with a party to whom professional advice has been given by the Member if there is a significant risk that the interests of the Member and the Client may differ; or b) provide advice to a party when the personal interests of the Member, a relative or an associate are in conflict with the interests of the party, without advising the party that independent advice should be obtained and securing a written acknowledgement of same from the party. ARTICLE 9. "Disclosure of Benefit or Fees" A Member will not receive directly or indirectly any rebate, fee, commission, discount or other benefit, whether monetary or otherwise without the full knowledge and prior consent of the Client. ARTICLE 10. "Fair and Reasonable Fees" A Member will charge fair and reasonable fees commensurate with services being provided and fully disclose the amount of such fees at the time the service is provided. ARTICLE 11. "Confidential Information" A Member will hold in strict confidence all information provided in confidence by a Client. This information remains confidential even after completion or termination of the client relationship, and will not be disclosed unless required to do so by law. ARTICLE 12. "Outside Interests" A Member who engages in another profession, business or occupation beyond the usual scope of services provided to Clients must not allow such outside interests to jeopardize the Member's professional integrity, independence or competence. ARTICLE 13. "Advertising" All advertising placed by a Member, whether on the Member's behalf or on behalf of a Client, will provide accurate information regarding the subject of the advertisement, and will not be false or misleading in any respect. ARTICLE 14. "Use of Designations" A Member will not use a designation granted by the Institute in any manner contrary to this Code of Professional Standards or the bylaws and policies of the Institute. Members must be in good standing with the Institute in order to use a designation in any form of identification, marketing or advertising. ARTICLE 15. "Other Institute Members" A Member will not make, authorize, or otherwise encourage any unfounded oral or written statements that are derogatory to, or disparaging of, another Member's business practice. All dealings between Members will be conducted with integrity and good faith. REIC 2600 Ethics and Business Practice

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ARTICLE 16. "Laws and the Conduct of Business" A Member will conduct business in strict accordance with all applicable laws, Bylaws and regulations, and in accordance with any Code of Professional Standards enacted by the Institute. ARTICLE 17. "Member Duty to report and Cooperate in Enforcing the Code" A Member has a duty and must report any violations of the Code of Professional Standards made by other Member(s). A Member will assist and fully cooperate in the enforcement of the Code of Professional Standards and the resolution of any matter brought before the Professional Standards Committee.

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9-3 KEY PRINCIPLES OF THE REIC CODE OF PROFESSIONAL STANDARDS ARTICLE

CODE

KEY PRINCIPLE

1

Quality of Service

You are the certified expert, you must perform as one.

2

Well informed and knowledgeable

You must keep current and informed on all matters related to your field of expertise and profession.

3

Full Disclosure to Client

You must disclose everything to your client throughout your professional relationship.

4

Care of Property

You must preserve, protect and enhance property entrusted to your professional care.

5

Fairness to all Parties

While professionally representing your client, you are fair and honest in all your activities.

6

Referral When Lacking Experience

You accept and complete only those assignments you are qualified to complete.

7

Representing Divergent Interest

If you must represent multiple parties, you must first disclose this intent, and then receive written approval from all parties to do so.

8

Conflict of Interest between Client and Member

Do not put yourself in a situation when your interests conflict with those of a client.

9

Disclosure of Fees

Discuss disclosure and document you’re agreed upon fee structure before commencing work.

10

Fair and Reasonable Fees

Your fees will reflect your expertise, experience, record and reputation and market conditions. Be prepared to justify them.

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11

Confidential Information

You must respect and protect the confidence of your client’s affairs.

12

Outside Interests

A REIC Member must act as one, regardless of outside interests or distractions.

13

Advertising

Only factual, tasteful and objective advertising may be used.

14

Use of Designations

REIC designations may be used and promoted only by those members who have earned them, and are REIC members in good standing.

15

Other Institute Members

You will treat your fellow REIC member with respect, and if you conduct business with them, do so with integrity and good faith.

16

Laws and the Conduct of Business

REIC members must adhere to and respect all laws, as well as this Code of Professional Standards.

17

Member Co-operation in Enforcing the Code

Every REIC member is responsible for respecting, promoting and ensuring compliance by all members of this Code of Professional Standards.

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9-4 REIC PROFESSIONAL DESIGNATIONS The Real Estate Institute of Canada is the premier provider of professional real estate education in the country. It offers several real estate designations, all of which have been designed to serve a basic need in the real estate industry. Review and discuss the following REIC designations: FRI

Fellow of the Real Estate Institute

CPM®

Certified Property Manager

CRF

Certified in Real Estate Finance

CLO

Certified Leasing Officer

CRU

Certified Residential Underwriter

CRP

Certified Reserve Planner

ARP

Associate Reserve Planner

ARM®

Accredited Residential Manager

ACoM

Accredited Commercial Manager

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9-5 IN-CLASS ASSIGNMENT #1

In a group (or on your own) you are to review an article(s) of the REIC Code and answer the following questions: 1.

REIC Article(s)

No. _____

No. _____

2.

Why was this Article(s) implemented?

No. _____

________________________________________________________

________________________________________________________

________________________________________________________

3.

What are some examples you are aware of / have experienced when this Article(s) have been violated in the real estate industry?

________________________________________________________

________________________________________________________

________________________________________________________

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9-6 CONCLUSION – KEY POINTS 1.

The Real Estate Institute of Canada is the preeminent educator of real estate professionals in the country. It was established in 1955. A leader in advanced real estate education, the Real Estate Institute of Canada, is an association that educates and certifies specialists in real estate.

2.

The Real Estate Institute of Canada also provides professional certification programs which lead to real estate designations which are well known and established in the industry and marketplace. The Real Estate Institute of Canada’s designations are internationally recognized. These designations identify committed and experienced real estate professionals.

3.

The professional education programs carefully designed by the Real Estate Institute of Canada are built upon the “Four Cornerstones of Professionalism” model; Education; Experience; Ethics; and Lifelong Learning.

4.

The Real Estate Institute of Canada’s Code of Ethics consists of 17 carefully drafted Articles. Each of these articles was created for a specific purpose. They are the member’s declaration of their professionalism, and the consumer’s assurance of the highest ethical conduct and skill, knowledge and performance in the industry.

5.

It is the responsibility of all candidates and members to know their Code of Ethics and Professional Standards and to seek professional accreditation and certification in the profession that they are actively engaged in.

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REIC 2600

CHAPTER TEN

GOALS AND OBJECTIVES: Chapter ten provides an introduction to the Institute of Real Estate Management and professional ethics with regard to the CPM and ARM designations.

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CHAPTER TEN – TABLE OF CONTENTS THE INSTITUTE OF REAL ESTATE MANAGEMENT (IREM) CODE OF ETHICS & CODES OF PROFESSIONAL CONDUCT AND STANDARDS 10-1 INSTITUTE OF REAL ESTATE MANAGEMENT CODE OF PROFESSIONAL ETHICS ........................... 174 10-2 CODE OF PROFESSIONAL ETHICS OF THE CPM AND ARM ......................................................... 178 10-3 CONCLUSION – KEY POINTS .................................................................................................. 190

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10-1 INSTITUTE OF REAL ESTATE MANAGEMENT CODE OF PROFESSIONAL STANDARDS AND ETHICS IREM INTRODUCTION: IREM was founded in 1933 with ethics as its cornerstone. Since then IREM has been providing education, resources, information and membership for real estate management professionals. Members of IREM are obliged to uphold the IREM Code of Professional Ethics, thus, conducting their professional activities in accordance with the Code. IREM actively enforces the Code – violations are processed within a defined structure, including an established peer review process which may result in disciplinary actions. IREM has a commitment to the real estate management profession and adopted its new and revised IREM Code of Professional Ethics to strengthen requirements for ethical and competent practice. The Code protects the public, promotes competition, reflects contemporary business practices and sends a powerful message to the marketplace that IREM Members act ethically regardless of their credential or membership type. This new code became effective on January 1, 2007.

IREM MEMBER PLEDGE: I pledge myself to the advancement of professional real estate management through the mutual efforts of Members of the Institute of Real Estate Management and by any other proper means available to me. I pledge myself to maintain the highest moral and ethical standards consistent with the objectives and higher purposes of the Institute. I pledge myself to seek and maintain an equitable, honourable, and cooperative association with fellow members of the Institute and with all others who may become a part of my business and professional life. I recognize and support the need to preserve and encourage fair and equitable practices and competition among all who are engaged in the profession of real estate management. I pledge myself to place honesty, integrity, and industriousness above all else and to pursue my gainful efforts with diligent study and ongoing education so that my services shall be beneficial to the general public and my obligations to my clients shall always be maintained at the highest possible level. I pledge myself to comply with the principles and declarations of the Institute of Real Estate Management as set forth in its Bylaws, Statement of Policies, and this Code of Professional Ethics.

ARTICLE 1: LOYALTY TO CLIENT, FIRM AND/OR EMPLOYER 174

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A Certified Property Manager, CPM Candidate, Accredited Residential Manager, Accredited Commercial Manager, or Associate Member (hereinafter referred to as MEMBER) shall at all times exercise loyalty to the interests of the client and the employer or firm with whom the MEMBER is affiliated. A MEMBER shall be diligent in the maintenance and protection of the interests and property of the employer and the client. A MEMBER shall not engage in any activity that could be reasonably construed as contrary to the interests of the client or employer. If an activity would result in a conflict between the interests of the firm or employer and the interests of the client, then the interests of the client shall take precedence.

ARTICLE 2: CONFIDENTIALITY A member shall not disclose to a third party any confidential or proprietary information which would be injurious or damaging to a client concerning the client’s business or personal affairs without the client’s prior written consent unless such disclosure is required or compelled by applicable laws and regulations.

ARTICLE 3: ACCOUNTING AND REPORTING Pursuant to the terms of the management agreement, a MEMBER shall use reasonable efforts to provide accurate, auditable financial and business records and documentation concerning each asset managed for the client, which records shall be available for inspection at all reasonable times by the client. A MEMBER shall furnish to the client, at mutually agreed upon intervals, regular reports concerning the client’s assets under management. A MEMBER shall not exaggerate, misrepresent, or conceal material facts concerning the client’s assets or any related transaction.

ARTICLE 4: PROTECTION OF FUNDS A MEMBER shall at all times serve as a fiduciary for the client and shall not commingle personal or company funds with the funds of a client or use one client’s funds for the benefit of another client, but shall keep the client’s funds in a fiduciary account in an insured financial institution or as otherwise directed in writing by the client. A MEMBER shall at all times exert due diligence for the maintenance and protection of the client’s funds against all reasonably foreseeable contingencies and losses.

ARTICLE 5: RELATIONS WITH OTHER MEMBERS OF THE PROFESSION A MEMBER shall not make, authorize or otherwise encourage any false or misleading comments concerning the practices of Members of the Institute of Real Estate Management. A MEMBER shall truthfully represent material facts in their professional activities. A MEMBER shall not exaggerate or misrepresent the services offered as compared with the services offered by other real estate managers. Nothing in this Code, however, shall restrict legal and reasonable business competition by and among real estate managers.

ARTICLE 6: CONTRACTS

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Any written contract between a MEMBER and a client shall be in clear and understandable terms and shall set forth the specific terms agreed upon between the parties, including a general description of the services to be provided by and the responsibilities of the MEMBER.

ARTICLE 7: CONFLICT OF INTEREST A Member shall not represent personal or business interests divergent from or conflicting with those of the client or employer and shall not accept, directly or indirectly, any rebate, fee, commission, discount, or other benefit, monetary or otherwise, which could reasonably be seen as a conflict with the interests of the client, employer or firm, unless the client or employer is first notified in writing of the activity or potential conflict of interest, and consents in writing to such representation.

ARTICLE 8: MANAGING THE ASSETS OF A CLIENT A MEMBER shall exercise due diligence in the maintenance and management of the client’s assets and shall make all reasonable efforts to protect it against all reasonably foreseeable contingencies and losses.

ARTICLE 9: DUTY TO FORMER CLIENTS AND FORMER FIRMS OR EMPLOYERS All obligations and duties of a MEMBER to clients, firms, and employers as specified in this Code shall also apply to relationships with former clients and former firms and employers. A MEMBER shall act in a professional manner when, for whatever reason, relationships are terminated between a MEMBER and a client and firm or employer. Nothing in this section, however, shall be construed to cause a MEMBER to breach obligations and duties to current clients and firm or employer.

ARTICLE 10: COMPLIANCE WITH LAWS AND REGULATIONS A MEMBER shall at all times conduct business and personal activities with knowledge of and in compliance with all applicable laws and regulations.

ARTICLE 11: EQUAL OPPORTUNITY A MEMBER shall not deny equal employment opportunity or equal professional services to any person for reasons of race, color, religion, sex, familial status, national origin, age, sexual orientation, or handicap and shall comply with all applicable laws and regulations regarding equal opportunity.

ARTICLE 12: DUTY TO TENANTS AND OTHERS 176

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A Member shall competently manage the property of the client with due regard for the rights, responsibilities and benefits of the tenants or residents and others lawfully on the property. A Member shall not engage in any conduct that is in conscious disregard for the safety and health of those persons lawfully on the premises of the client’s property.

ARTICLE 13: DUTY TO REPORT VIOLATIONS Each MEMBER has a responsibility to provide the Institute of Real Estate Management with any significant factual information that reasonably suggests that another MEMBER may have violated this Code of Professional Ethics. Such information must be presented as outlined in the Institute of Real Estate Management’s Bylaws and Statement of Policies.

ARTICLE 14: ENFORCEMENT The interpretation of compliance with this Code is the responsibility of the Ethics and Discipline Committee of the Institute of Real Estate Management. Any violation by a MEMBER of the obligations of this Code and any disciplinary action for violation of any portion of this Code shall be determined and carried out in accordance with and pursuant to the terms of the Bylaws and Statement of Policies of the Institute of Real Estate Management. The result of such disciplinary action shall be final and binding upon the affected MEMBER and without recourse to the Institute, its officers, Governing Councilors, Members, employees, or agents.

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10-2 CODE OF PROFESSIONAL ETHICS

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182

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184

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10-3 CONCLUSION – KEY POINTS 1.

The Institute of Real Estate Management was founded in 1933 by committed professionals who wanted to standardize the best management practices and policies for professional real estate management.

2.

The Institute of Real Estate Management has four key professional designations that candidate members may obtain. 1. 2. 3. 4.

Certified Property Manager (CPM) Accredited Residential Manager (ARM) Accredited Commercial Manager (ACoM) Accredited Management Organization (AMO)

3.

Professional real estate management firms can also achieve the Accredited Management Office (AMO) designation by meeting the Institute’s guidelines and criteria.

4.

There are fourteen Articles to the IREM Code. All have been specifically designed with professional property management in mind. They are concise but detailed.

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REIC 2600

CHAPTER ELEVEN

GOALS AND OBJECTIVES: Chapter eleven will explore the Canadian Real Estate Association’s (CREA) Code of Ethics and Codes of Professional Conduct & Standards.

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CANADIAN REAL ESTATE ASSOCIATION (CREA)

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CHAPTER ELEVEN – TABLE OF CONTENTS THE CANADIAN REAL ESTATE ASSOCIATION (CREA) CODE OF ETHICS & CODES OF PROFESSIONAL CONDUCT AND STANDARDS 11-1 THE CANADIAN REAL ESTATE ASSOCIATION (CREA) ........................................................ 196 11-2 CONCLUSION – KEY POINTS ............................................................................................. 199

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11-1 THE CANADIAN REAL ESTATE ASSOCIATION (CREA) MISSION STATEMENT The Canadian Real Estate Association represents and promotes the interests of the members, enhances members’ professionalism and ability to succeed, and advocates policies that ensure real estate property rights and ownership.

KEY OBJECTIVES: ✓

✓ ✓ ✓ ✓

✓ ✓

To maintain an organizational structure for CREA. Its volunteer leadership and professional staff are there to effectively address the expectations of all members across Canada. To promote, protect and safeguard all certification and design marks associated with this association. To maintain a continuing relationship with the Federal Government in order to monitor and influence all public policy which affect the industry. To help members become more aware of the Competition Act and how to apply it to their business activities. To collect, analyze and disseminate data/information on significant market, economic, demographic and technological conditions affecting the housing and real estate industry. To formulate, promote and foster consistent professional standards of business practice, integrity and ethical conduct among the membership. To provide an interactive forum for the analysis and communication of industry issues, trends, and association benefits.

ORGANIZED REAL ESTATE IN CANADA Organized real estate in Canada has three levels. The real estate board in general operates at a local level; the provincial or territorial association operates within a province or territory, and the national perspective is the mandate of The Canadian Real Estate Association (CREA). The real estate board is the primary point for processing membership and the recording and collection of dues. It also operates a Multiple Listing Service® system that in turn, provides data for display on either REALTOR.ca or ICX.ca. The local board develops and implements the regulations that support CREA’s national policies, and is responsible for the enforcement of the Code of Ethics and the Standards of Business Practice. The board also provides an arbitration service to resolve disputes between members and determines membership prerequisites, including the planning of seminars and workshops. The board also ensures local industry representation and works in liaison with provincial associations and CREA. The association at the provincial or territorial level handles membership processing in non-board areas and is the facilitator for the maintenance of board jurisdictions, or for resolving disputes 196

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between boards or members from different boards in the same province. The association is also responsible for provincial or territorial licensing and education, and for the development and implementation of political action activities at the provincial level. The members of the national association (CREA) include those of boards and associations. The responsibilities of The Canadian Real Estate Association include national and international representation of the industry and the maintenance, protection and standards for certification marks and trademarks. CREA also develops and maintains a national Code of Ethics, Privacy Code, and Standards of Business Practice, which are implemented at the local board level. The national association also provides arbitration services for disputes between provincial or territorial associations, or between members from different provinces.

HISTORY OF REAL ESTATE The concept of developing an informal association of local real estate agents originated in the United States in the 1880s, and by the turn of the century, about 15 real estate Boards had been established. The National Association of REALTORS® (NAR) was formed in the U.S. in 1908 with 19 Boards and one state Association. Organized real estate in Canada is almost as old as the country itself. The very first real estate Board was set up in 1888 in the growing community of Vancouver. Back then, a commercial lot on Hornby Street near the Hotel Vancouver sold for $600. The Vancouver Board was active until the start of the First World War when operations were suspended. It resumed in 1919 and has been operating ever since. The distinction of the oldest, continuous running Board belongs to Winnipeg; it started in 1903, and the Winnipeg Real Estate Board is the first in Canada to celebrate the 100th anniversary. A Board was incorporated in Windsor in 1919, and the Toronto Board was incorporated in 1920. Boards in Ottawa, Hamilton, Regina and Victoria followed in 1921. More than half of the existing real estate Boards in Canada were created after 1955, in part because of the evolution of the “Photo Co-Op System” that was introduced in 1951. That was the forerunner of today’s MLS®, introduced in 1962. The Co-op System not only created a need for an organization to establish rules and promote co-operation among agents but also to provide funds to operate a real estate Board. That’s when technology first changed the real estate industry. During the final years of the Second World War, leaders of Canada’s real estate industry were increasingly concerned the federal government would continue some wartime measures as a permanent policy, including rent control and other rules relating to property. They realized that only by forming a national organization could the industry hope to make any impact on the federal government's post-war planning. On March 2, 1943, 11 Ontario Boards and delegates from Victoria, Vancouver, Edmonton, Winnipeg and Montreal drew up the first constitution of the Canadian Association of Real Estate

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Boards (CAREB). The first CAREB conference, presided over by founding president Charles Purnell of Hamilton, was in Niagara Falls in April 1944. That’s when the term "REALTOR®" was adopted for use by all those who were members of CAREB. In 1955, CAREB concentrated on promoting the concept and organization of the "Photo Co-op Listing" system (now MLS®), and on replacing the sporadically published newsletter with a monthly magazine entitled the "Canadian REALTOR®”. The Canadian Institute of REALTORS® was also established in 1955, in order to encourage the provinces to establish real estate courses. As an incentive, qualified graduates could use the FRI designation, or “Fellow of the REALTORS® Institute”. Correspondence courses were organized for the first time through the University of Toronto, and the first class "graduated" in 1956. CAREB evolved into what is now known as The Canadian Real Estate Association, and in 1986 the offices were moved from Toronto to Ottawa, in effect acknowledging the increasing importance of CREA's government lobbying activities.

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11-2 CONCLUSION – KEY POINTS 1. The Canadian Real Estate Association is the governing body for licensed REALTORS® in Canada. 2. Real estate is administered provincially in Canada. Licensed REALTORS® are under the guidance and supervision of their local Board, their provincial real estate association and the Canadian Real Estate Association. 3. The first Code of Ethics for REALTORS® was approved in 1913 by the National Association of Real Estate Boards. It is referred to as the “Ten Commandments of the Real Estate Fraternity”. 4. The preamble to the REALTOR® Code is one of the great statements in real estate or any other professional association. . . . Under all is the land 5. The REALTOR® Code and Standards of Business Practice goal is the continuing quest for professionalism through ethical obligations based on: ✓ Honesty ✓ Integrity ✓ Fairness ✓ Accountability ✓ Professionally competent service

6. The REALTOR® Code has been amended and expanded several times over the years. These changes are based upon the current state of the real estate industries and practices and are meant to reflect the “changing needs of the public and the values of society”. 7. There are currently 28 Articles to the CREA Standards of Business Practice. These Articles have been reviewed and amended from time to time to reflect the changing nature of real estate in Canada.

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CHAPTER TWELVE

GOALS AND OBJECTIVES: This chapter will reinforce that good ethics means good business and the pursuit of excellence depends upon solid ethics.

200

WHY GOOD ETHICS = GOOD BUSINESS

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CHAPTER TWELVE – TABLE OF CONTENTS CONCLUSION 12-1 WHY GOOD ETHICS = GOOD BUSINESS .................................................................................. 204 12-2 SOLID ETHICS REPLACE EXCUSES ........................................................................................... 204 12-3 THE PURSUIT OF EXCELLENCE DEPENDS UPON SOLID ETHICS .................................................. 206 12-4 UNDER ALL IS THE LAND… REAL ESTATE AND ETHICS .............................................................. 207 12-5 IN-CLASS ASSIGNMENT #1 - YOUR PERSONAL ASSESSMENT .................................................... 208 12-6 IN-CLASS ASSIGNMENT #2 – MY PERSONAL CODE OF ETHICS .................................................. 211 12-7 CONCLUSION – KEY POINTS .................................................................................................. 212 12-8 CONCLUSION ....................................................................................................................... 213

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12-1 WHY GOOD ETHICS = GOOD BUSINESS In this final section we review, discuss and complete: 1.

Why Good Ethics = Success and Satisfaction in Business.

2.

Solid Ethics Replace Excuses.

3.

The Pursuit of Excellence Depends upon Solid Ethics.

4.

Real Estate and Ethics.

5.

Your Personal Assessment of Ethical Issues and Practice.

6.

Your Personal Code of Ethics.

7.

In Conclusion … In Business and Life, it pays to be Ethical.

These final sections reinforce the importance of solid ethics and standards in both your personal and professional lives. By applying ethical practices in your decision making and actions, you build upon your reputation, which directly equates to benefits – both monetary and otherwise. You will also have peace of mind and the satisfaction of knowing your success and rewards came honestly and through your own efforts. Remember the two components of success:

12-2 SOLID ETHICS REPLACE EXCUSES 204

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*** There is no acceptable excuse or justification for unethical behaviour and practices; never. *** There is no justification or remedy for unethical and unprofessional business practices. *** The conscientious and highly skilled professional does not make excuses. Those who are professional and ethical do not have to rely on excuses to explain their behaviour or character deficiencies. Excuses are far too common in business and personal affairs. Together with the “would have / should have / could have” lament, excuses are used to compensate for lack of effort and ethics. ❖ Everybody does it ... ❖ Why should I play by the rules when others do not ... ❖ No one will know ... ❖ No one is affected or hurt ... ❖ This is the only time I will ever ... ❖ If I was better treated / paid I would not have to ... ❖ I will make up for this action by ... ❖ This is how my business/profession operates… ❖ I have to look out for no 1 ... ❖ The other party does not respect me, why should I respect them ... ❖ What difference does it matter that I study ethics, and try to do right, when most will not ... WHAT ARE SOME OTHER EXCUSES YOU’VE HEARD OF…?

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12-3 THE PURSUIT OF EXCELLENCE DEPENDS UPON SOLID ETHICS Pursuing excellence is a noble goal. As you contemplate and move upwards through Maslow’s Hierarchy of Needs (or any such criteria you set), you will by extension pursue excellence. This pursuit of excellence will incorporate the following key attributes. AMBITION: Willingness to take initiatives to reach high targets. VISION: Keeping long-term, future success as a constant guide. CONFIDENCE: The conviction that you can achieve what you want to do. ABILITY TO TAKE RISKS: Readiness to take chances rather than play safe. DRIVE AND ENERGY: The ability to concentrate on mental and physical powers. COMPETITIVE SPIRIT: Relentless perfectionism in seeking to be the best. SELF-CRITICISM: Facing up to mistakes and failures, and learning from them. LEADERSHIP: The ability to mobilize others to achieve group ambitions. ETHICS: You must have a moral compass to ensure you are on the true path towards personal satisfaction and excellence.

… Ethics is the foundation of excellence. The Greek’s pursuit of excellence gave us the word “Ethike”, which further translates as “ethos = habit”. Good habits lead to good and ethical character. 206

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12-4 UNDER ALL IS THE LAND… REAL ESTATE AND ETHICS “Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. Through the REALTOR®, the land resource of the nation reaches its highest use and private land ownership its widest distribution. The REALTOR® is instrumental in moulding the form of his or her community and the living and working conditions of its people”. . . . From the Preamble to the REALTOR® Code of Ethics

Read and reflect once again upon the above words, which open the preamble of the REALTOR® Code of Ethics. These are powerful words, carefully chosen to convey the personal and professional responsibilities of those who enter freely into this industry. Can you; will you; do you live up to these words? It cannot be overemphasized how broad and important the role we who work in real estate play in both society and its economy. Therefore, it cannot be overemphasized how critical it is that we practitioners enhance and refine our professional skills, education, and experience. And, above all, it is our responsibility at all times to act honestly and ethically in all we do; all we say; and how we execute our professional duties and skills. Your on-going success and satisfaction with your work and yourself will ultimately be a direct reflection on your personal ethics and the reputation and opportunities it has created. To be a successful and well-respected professional, you must first be a solid and ethical citizen – the best and most complete person you can be.

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12-5 IN-CLASS ASSIGNMENT #1 - YOUR PERSONAL ASSESSMENT The following self-assessment is based upon the material reviewed in this course. This is your personal reflection and objective review. This assignment will be discussed in class, but personal responses will not. There are two columns for your answers. One is to be completed now, the other at a later date. This will provide you with a “checkup”, and means to re-evaluate your progress as you move forward in your career.

RATE YOUR KNOWLEDGE AND COMPREHENSION OF THE FOLLOWING: Date:

Date:

1.

Why we study ethics

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

2.

Knowledge of ethics

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

3.

Knowledge of ethics history and tradition

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

The responsibilities of the Real Estate Professional

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

5.

The Four Quests

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

6.

Understanding my Decision Making Style

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

7.

My Moral Reasoning

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

8.

Maslow’s Hierarchy of Needs

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

How I will achieve my Self-Actualization Needs

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

4.

9.

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10.

My Ethical Decision Making Style

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

Knowledge of the Negotiating Process

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

12.

My negotiating abilities

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

13.

Knowledge and use of the Ethics Check

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

14.

Codes of Ethics

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

15.

Understanding of my Professional Code

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

My compliance with my Codes

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

My willingness to promote and defend these Codes

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

18.

Professional Standards

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

19.

Fiduciary Duty

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

20.

The Pillars of Agency

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

21.

Professional Courtesy

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

22.

Success: What I know about my job

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

23.

Success: How I do my job

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

24.

My knowledge of why Good Ethics means Good Business

□ Poor □ Fair □ Good

□ Poor □ Fair □ Good

11.

16.

17.

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The committed real estate professional knows that good ethics does indeed mean good business - and ultimately a successful and satisfying career in this, the industry you have chosen to work in. You, therefore, accept the responsibilities of your position, and your actions. You are prepared to be held accountable for your decisions and performance, and likewise will hold others accountable for theirs. You also acknowledge and accept that the conscientious and focused professional never stops learning, improving themselves, and striving to do their best, and try to be their best. Solid and consistent business and personal ethics are the foundation we build our lives and careers upon.

“Good people do not need laws to tell them to act responsibly, while bad people will find a way around laws”. - Plato

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12-6 IN-CLASS ASSIGNMENT #2 – MY PERSONAL CODE OF ETHICS The following is your personal Code of Ethics and credo. It incorporates what you have learned, what you believe, what you feel, and how you act. The following Code of Ethics defines you. MY PERSONAL CODE OF ETHICS IS: ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ I WILL ACHIEVE MY CREDO BY: PERSONAL GROWTH: ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ PROFESSIONAL GROWTH: ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ EDUCATIONAL GROWTH: ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________

________________________________ Signature

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______________________________ Date

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12-7 CONCLUSION – KEY POINTS 1. Honesty and the perceived ethical ratings of individuals and their professions are critical. Reputation precedes both yourself and your chosen profession. Once the perception is made that your honesty or ethical behaviour is suspect, it is very difficult to rehabilitate it. 2. Some professions simply have a better reputation for honesty and higher ethical standards than others. Real estate practitioners will always find their profession under intense scrutiny from the public. This is due to the large number of practitioners, the divergence in their practices, and the quality of service, skill, and character of such a large number of individuals. Also, real estate practitioners are involved in transactions that have a high degree of emotion and financial risk/reward associated with them. This increases the need and expectation of a high standard of care and ethics. 3. Regardless of your specialty within the real estate industry, “REALTORS®” are generally lumped together when spoken of. It is incumbent therefore on individuals, companies, and their chosen field of practice to speak loud and clear about their own professional standards and ethics. 4. Ethics eliminates the need for endless excuses. 5. Ethics are the Foundation of Excellence 6. Plan for success in your personal and professional life. Know both your strengths and weaknesses. Be honest with yourself. Commit to and execute your own action plan for life and business. 7. There is a crisis of confidence in our institutions and leadership. Without moral authority, respect, and competency you cannot lead. We need ethical role models. There seems to be a continuous decline in the behaviour and standards within our society. Is this a fair comment – and if you believe it to be, there will be consequences? 8. Life is a series of events and journeys. Have a long-term perspective for all you undertake in your personal and professional endeavours. 9. Good Ethics is Good Business.

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12-8 CONCLUSION . . . CONSIDER AND REFLECT ON THE FOLLOWING POINTS: ❖ Knowledge is power. You are first hired and then paid for your expertise and skill at analyzing and solving issues. Continually develop and refine your knowledge and skill sets. You are professionally obligated to do so. ❖ Do not exceed your level of knowledge, skills or experience. Do not hesitate to state that you are not qualified to take on an assignment or part thereof. (Doing so will only enhance your reputation). Be grateful if clients are so suitably impressed with you that they ask you to consider undertaking larger and more complex assignments. Analyze if you should consider increasing your knowledge and experience in these areas. ❖ Establish a specialty that interests and motivates you and which is also economically rewarding. Train yourself in this field and keep current on it. ❖ Set professional development and certification goals for yourself and an agenda to achieve them. Always be studying and learning. Seek high quality and well established and regarded professional designations. ❖ Few businesses will undergo more profound change than the real estate industry. What will/are you doing to distinguish yourself from the competition? Being in this course and working towards an accreditation already separates you from the pack. ❖ Set aside part of your day/week for reading and study related to your business. Retain this textbook as a reference source. Build your professional library. Remember, your clients will hire you not for just what you know, but how you analyze, interpret and apply this information towards your client’s objectives. ❖ You are deemed by the courts and society to be a professional. Always act like one. ❖ As a professional, you are expected to conduct yourself in accordance with your Codes and all applicable laws and regulations. There are no excuses not to. There is little or no defense in a court of law for professional negligence. ❖ Know your applicable Code of Ethics and Professional Standards and Practices. As you are deemed to be a Real Estate Professional, there is no excuse if you breach your Codes of Ethics and Standards.

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❖ Use your Codes of Ethics and Professional Standards as meaningful guidelines in your practice. They are a framework for you to work within and they are of great assistance and counsel as you establish and maintain your practice. ❖ Your promotional information, websites, and presentations should reference the professional organizations you belong to; the designations you hold; and the Code of Ethics and Professional Standards which you are committed to uphold and are bound by. Prospective clients will therefore be able to use these criteria to differentiate you from your competition. ❖ Document, document, document! (Whoever takes and keeps the best notes usually wins in disputes). A professional always maintains meticulous and factual records. Have a standard procedure internally and within your corporate structure for memorandum production and retention. ❖ Cutting corners will always lead to consequences. Think objectively about the implications of your actions – before you begin. ❖ Beware of “Slippery Slopes” in life and business. ❖ Select your partners in life and business carefully. Scrutinize them well and do not hesitate to ask them and others hard questions. Avoid negative people. ❖ Your reputation is your greatest business asset. It precedes you into any meeting. ❖ First impressions do matter – Greatly! ❖ A damaged reputation is very difficult, if not impossible, to rehabilitate or repair. ❖ Reputation = Referrals = Rewards ❖ If you belong to a professional or community-based organization, involve yourself in its activities and governance. You are a direct beneficiary of those who came before you to establish these organizations and their mandate and standards. Any organization can only survive and be as strong as its current membership. ❖ A prosperous and well-functioning society requires that those who benefit also give back. Always try to give back to society and others more than you have received. 214

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❖ Work Hard, Live Well. Aristotle said, “the pursuit of leisure follows labour”. ❖ Remember the Real Estate Institute of Canada’s Ethics Check. ✓ IS IT LEGAL? ✓ IS IT BALANCED? ✓ HOW WILL IT MAKE ME FEEL ABOUT MYSELF?

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...

ULTIMATELY ETHICS IS ABOUT COMMON SENSE AND COMMON DECENCY.

...

AND FINALLY, REMEMBER WHAT THE GREEKS DEFINED AS ETHICS: ETHIKE OR ETHOS = HABIT AND CHARACTER.

NOW CONSIDER THE FOLLOWING WORDS.

WATCH YOUR THOUGHTS; THEY BECOME YOUR WORDS WATCH YOUR WORDS; THEY BECOME YOUR ACTIONS WATCH YOUR ACTIONS; THEY BECOME YOUR HABITS WATCH YOUR HABITS; THEY BECOME YOUR CHARACTER WATCH YOUR CHARACTER; IT BECOMES YOUR DESTINY

. . . IN CONCLUSION . . . GOOD ETHICS MEANS GOOD BUSINESS!

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APPENDIX A:

Thinking Ethically/The Case of Maria Elena

APPENDIX B:

The Parable of the Sadhu

APPENDIX C:

Tylenol Case Study

APPENDIX D:

McMillan vs Traynor Part I Letter

APPENDIX E:

Up Against Walmart

APPENDIX F:

CREA Code of Ethics

APPENDIX G:

What Was Volkswagen Thinking

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Critical Thinking 1. If you were Bowen McCoy, what would you have done? Refer to ethical theories to support your answer. 2. How do your personal values express themselves in your business life?

APPENDIX C: CASE STUDY - THE TYLENOL CRISIS CASE

How Effective Public Relations Saved Johnson & Johnson. by Tamara Kaplan, The Pennsylvania State University "Public Relations is the management function that establishes and maintains mutually beneficial relationships between an organization and the public on whom its success or failure depends." (Broom, Center, Cutlip, 1) In the fall of 1982, McNeil Consumer Products, a subsidiary of Johnson & Johnson, was confronted with a crisis when seven people on Chicago's West Side died mysteriously. Authorities determined that each of the people that died, had ingested an Extra-Strength Tylenol capsule laced with cyanide. The news of this incident traveled quickly and was the cause of a massive, nationwide panic. These poisonings made it necessary for Johnson & Johnson to launch a public relations program immediately, in order to save the integrity of both their product and their corporation as a whole. The Story of the Tylenol Poisonings When 12 year-old Mary Kellerman of Elk Grove Village, Ill., awoke at dawn with cold symptoms, her parents gave her one Extra-Strength Tylenol and sent her back to bed. Little did they know, they would wake up at 7:00 a.m. to find their daughter dying on the bathroom floor. (Beck, 32) That same morning, Adam Janus, 27, of Arlington Heights, Ill., took Extra- Strength Tylenol to appease a minor chest pain. An hour later, Janus suffered a cardiopulmonary collapse and died suddenly. That very evening, when relatives gathered at Janus' home, Adam's brother Stanley, 25, and his wife Theresa, 19, took Tylenol from the same bottle that had killed their loved one. They were both pronounced dead within the next 48 hours. (Tifft, 18) Mary Reiner, 27, of the neighboring suburb, Winfield, died after taking two Tylenol capsules the next day. Reiner, who was dead within hours at the local hospital, had just recently given birth to her fourth child. Paula Prince, 35, a United Airlines stewardess, was found dead in her Chicago apartment with an open bottle of Extra- Strength Tylenol nearby. Mary McFarland, 31, of Elmhurst, Ill., was the seventh victim of the cyanide-laced Tylenol capsules. (Beck, 32) (Tifft, 18)

The cause of these strange and sudden deaths did not remain a mystery for long. The connection to Tylenol was discovered within days with the help of two off-duty firemen who were at home listening to their police radios. The two men, Philip Cappitelli and Richard Keyworth were exchanging information about the deaths, when they realized that Tylenol was mentioned in two of the reports. The men made some assumptions and told their superiors that there was a possibility that the over the counter drug was the mysterious killer. (Tifft, 18) The Extra-Strength Tylenol capsules in question were each found to contain 65 milligrams of cyanide. The amount of cyanide necessary to kill a human is five to seven micrograms, which means that the person who tampered with the pills, used 10,000 times more poison than was needed. Dr. Thomas Kim, chief of the Northwest Community Hospital at the time of the poisonings, said, "The victims never had a chance. Death was certain within minutes." (Tifft, 18) (Tylenol Murders, 3) The nation was warned about the danger of Tylenol as soon as a connection could be made. Police drove through Chicago announcing the warning over loudspeakers, while all three national television networks reported about the deaths from the contaminated drug on their evening news broadcasts. A day later, the Food and Drug Administration advised consumers to avoid the Tylenol capsules, "until the series of deaths in the Chicago area can be clarified." (Tifft, 18) Officials at McNeil Consumer Products made clear that the tampering had not taken place at either of its plants, even though cyanide was available on the premises. A spokesman for Johnson & Johnson told the media of the company's strict quality control and said that the poisonings could not have been performed in the plants. Because the cyanide laced Tylenol had been discovered in shipments from both of the company's plants and had only been found in the Chicago area, authorities concluded that any tamperings must have occurred once the Tylenol had reached Illinois. (Beck, 33) The tainted Tylenol capsules were from four different manufacturing lots. Evidence suggests that the pills were taken from different stores over a period of weeks or months. The bottles, some of which had five or less cyanide laced capsules and one which had ten, were tampered with and then placed back on the shelves of five different stores in the Chicago area. It seems that the person responsible for the deaths, spent a few hours distributing the laced bottles of Tylenol. (Tylenol Murders, 2) The publicity about the cyanide laced capsules immediately caused a nationwide panic. A hospital in Chicago received 700 telephone calls about Tylenol in one day. People in cities across the country were admitted to hospitals on suspicion of poisoning by cyanide. (Tifft, 18) Along with a nationwide scare, the poisoned capsules brought with them copycats, who attempted to simulate the tamperings in Chicago. In the first month after the Tylenol related deaths, the Food and Drug Administration counted 270 incidents of suspected product tampering. Although, the FDA thinks this number may have been inflated by the hysteria of consumers who blame any type of headache or nausea on food and medicine they think may have been poisoned. The FDA estimated that only about 36 of the cases were, "true tamperings." (Church, 27) After this crisis, Johnson & Johnson was faced with quite a dilemma. They needed to find the best way to deal with the tamperings, without destroying the reputation of their company and their most profitable product, Tylenol. Many marketing experts thought that Tylenol was doomed by doubts that the public may have had to whether or not the product was safe. "I don't think they can ever sell another product under

that name," advertising genius Jerry Della Femina told the New York Times in the first days following the crisis. "There may be an advertising person who thinks he can solve this and if they find him, I want to hire him, because then I want him to turn our water cooler into a wine cooler." (Knight, 2) What Did Johnson and Johnson Do? Della Femina was quite wrong in assuming that Tylenol would never sell again. Not only is Tylenol still one of the top selling over the counter drugs in this country, but it took very little time for the product to return to the market. Johnson and Johnson's handling of the Tylenol tampering crisis is considered by public relations experts to be one of the best in the history of public relations. The public relations decisions made as a result of the Tylenol crisis, arrived in two phases. The first phase was the actual handling of the crisis. The comeback of both Johnson & Johnson and Tylenol, was the second phase in the public relations plan. The planning for phase two began almost as soon as phase one was being implemented. Phase one of Johnson & Johnson's public relations campaign was executed immediately following the discovery that the deaths in Chicago were caused by Extra- Strength Tylenol capsules. As the plan was constructed, Johnson & Johnson's top management put customer safety first, before they worried about their companies profit and other financial concerns. The company immediately alerted consumers across the nation, via the media, not to consume any type of Tylenol product. They told consumers not to resume using the product until the extent of the tampering could be determined. Johnson & Johnson, along with stopping the production and advertising of Tylenol, recalled all Tylenol capsules from the market. The recall included approximately 31 million bottles of Tylenol, with a retail value of more than 100 million dollars. (Broom, Center, Cutlip, 381) This was unusual for a large corporation facing a crisis. In many other similar cases, companies had put themselves first, and ended up doing more damage to their reputations than if they had immediately taken responsibility for the crisis. An example of this was the crisis that hit Source Perrier when traces of benzene were found in their bottled water. Instead of holding themselves accountable for the incident, Source Perrier claimed that the contamination resulted from an isolated incident. They then recalled only a limited number of Perrier bottles in North America. (Broom, Center, Cutlip, 59, 381) When benzene was found in Perrier bottled water in Europe, an embarrassed Source Perrier had to announce a world wide recall on the bottled water. Apparently, consumers around the world had been drinking contaminated water for months. Source Perrier was harshly attacked by the media. They were criticized for having little integrity and for disregarding public safety. (Broom, Center Cutlip, 59) Johnson & Johnson, on the other hand, was praised for their actions by the media for their socially responsible actions. Along with the nationwide alert and the Tylenol recall, Johnson & Johnson established relations with the Chicago Police, the FBI, and the Food and Drug Administration. This way the company could have a part in searching for the person who laced the Tylenol capsules and they could help prevent further tamperings. Johnson & Johnson was given much positive coverage for their handling of this crisis. (Atkinson, 2) (Broom, Center, Cutlip, 381)

An article by Jerry Knight, published in The Washington Post on October 11, 1982, said, "Johnson & Johnson has effectively demonstrated how a major business ought to handle a disaster." The article stated that, "This is no Three Mile Island accident in which the company's response did more damage than the original incident." The Washington Post cited many incidents where public relations programs at large companies failed in crisis situations. They applauded Johnson & Johnson for being honest with the public. The Washington Post article stressed that it must have been difficult for the company to withstand the temptation to disclaim any possible link between Tylenol and the seven sudden deaths in the Chicago area. They added that the company never attempted to do anything, other than try to get to the bottom of the deaths. According to the article, "what Johnson & Johnson executives have done is communicate the message that the company is candid, contrite, and compassionate, committed to solving the murders and protecting the public." The Washington Post also mentioned that Johnson & Johnson almost immediately put up a reward of $100,000 for the killer. The Kansas City Times published an article on November 12, 1982, by Rick Atkinson, that was comprised of interviews with top executives at Johnson & Johnson shortly after the Tylenol crisis. James E. Burke, chairman of the board of the corporation at the time of the tamperings, said that the poisonings put everyone at Johnson & Johnson into shock. He did say though, that some of the initial public relations decisions pertaining to this case were easy to make. Burke said that the decisions to pull advertising for Tylenol, recall all of the bottles from the lots that were laced with cyanide, and send warnings to health professionals, were made with no hesitation. Although it seemed almost impossible that Johnson & Johnson could be held responsible for any of the tampering, the corporation had a hard decision to make: Should they implement a nationwide recall on the product? There was a great deal of discussion on recalling Tylenol on a national level. Some executives worried about the panic that could result in the industry over such a wide scale recall. There were arguments over which Tylenol products to pull and arguments over whether recalling 100 million dollars in Tylenol would humor the killer and spur him to poison other products. The executives held off on the huge recall through the first weekend after the deaths. That Saturday, three of the victims of the poisoned capsules were buried. There was coverage of the burials that night on television. Johnson & Johnson executives wept not only out of grief, but some out of guilt. One top executive said, "it was like lending someone your car and seeing them killed in a traffic accident." That weekend, opposition to the national recall all but vanished and it was announced on Tuesday that 31 million bottles of Extra-Strength Tylenol capsules would be pulled off of merchants shelves. On Thursday, as a final step in this phase of Johnson & Johnson's public relations plan, the company offered to exchange all Tylenol capsules that had already been purchased for Tylenol tablets. It was estimated that millions of bottles of Tylenol capsules were in consumers homes at the time. Although this proposition cost Johnson & Johnson millions more dollars, and there may not have been a single drop of cyanide in any of the capsules they replaced, the company made this choice on their own initiative in order to preserve their reputation. (Knight, 2)

Tylenol's Comeback The planning for phase two of Johnson & Johnson's public relations plan, or the "comeback" phase, was already in the works by the time the first phase had been completed. Tylenol, which had a massive advertising budget prior to the poisonings, had become the number one alternative to aspirin, in the nation. The product had 37 percent of the market for over-the-counter painkillers. (Knight, 2) Because Tylenol was such a huge money-maker for Johnson & Johnson, the company unleashed a extensive marketing and promotional program to bring Tylenol back to it's position as the number one over-the-counter analgesic in the United States. (Johnson & Johnson) Chairman of the board, James E. Burke said, in regard to the comeback, "It will take time, it will take money, and it will be very difficult; but we consider it a moral imperative, as well as good business, to restore Tylenol to it's preeminent position." (Johnson & Johnson) In November, less than six weeks after the nation learned of the sudden deaths in Chicago, Johnson & Johnson subsidiary, McNeil Consumer Products, revealed its public relations plan for the recovery of Tylenol, at their sales conference in New Brunswick, New Jersey. There were five main components of the McNeil/ Johnson & Johnson comeback crusade. (Johnson & Johnson) Tylenol capsules were reintroduced in November baring a new triple-seal tamper- resistant packaging. The new packaging was appearing on market shelves by December, making McNeil Consumer Products the first company in the pharmaceutical industry to react to the Food and Drug Administration's new regulations and the national mandate for tamper-resistant packaging. (Johnson & Johnson) To advocate the use of Tylenol to customers who may have strayed from the brand as a result of the tamperings, McNeil Consumer Products provided $2.50-off coupons that were good towards the purchase of any Tylenol product. The coupons could be obtained by consumers calling a special toll-free number. This offer was also made in November and December through popular newspapers where the $2.50 coupon was printed. (Johnson and Johnson) Sales people at McNeil planned to recover former stock and shelf facing levels for Tylenol by putting a new pricing program into effect. This new program gave consumers discounts as high as 25 percent. Also, a totally new advertising campaign was put in the works. The new advertising program was launched in 1983. (Johnson & Johnson) Finally, over 2250 sales people from Johnson & Johnson domestic affiliates were asked by Johnson & Johnson to make presentations to people in the medical community. These presentations were made by the millions to promote support for the reintroduction Tylenol. The Tylenol comeback was a great success. Many executives attribute the success of the comeback to the quick actions of the corporation at the onset of the Tylenol crisis. They think that if Johnson & Johnson had not been so direct in protecting the public interest, Tylenol capsules would not have reemerged so easily. (Johnson & Johnson) An article by Howard Goodman, published in The Kansas City Times, on November 12, 1982, covering a press conference where James E. Burke launched Johnson & Johnson's national campaign for the comeback of Tylenol, applauded the corporation's efforts. The article, in a sense, provided free advertising for Tylenol's new packaging, stating, "the package has glued flaps on the outer box, which must be forcibly opened. Inside a tight plastic seal surrounds the cap and an inner foil seal wraps over the mouth of the

bottle... The label carries the warning: 'Do not use if safety seals are broken.' " This article was just the type of coverage that Johnson & Johnson needed to promote their recovery. More positive coverage of the Tylenol comeback was published in Advertising Age Magazine on November 15, 1982, in an article written by Nancy Giges. Not only did this article tell of Johnson & Johnson's new tamper-resistant packaging, but it outlined the corporation's entire plan for recovery. The New York Times, published an article by, Tamar Lewin, on December 24, 1982, that announced to consumers that Tylenol had, in a short period of time, gained back much of the market that it lost prior to the cyanide deaths. The article stated that at that time Tylenol had 24 percent of the market for pain relievers, not much less than the 37 percent of the market that the product held before the crisis. This article continued the media trend of publicizing Tylenol's comeback in a positive light. How Did Johnson & Johnson Make These Decisions? The public relations decisions made in light of the Tylenol crisis had to have come from somewhere. This basis for decision making became a bit more clear in 1983, when the New Jersey Bell Journal published article written by Lawrence G. Foster. Foster, Corporate Vice President of Johnson & Johnson, at the time of the Tylenol poisonings, joined the company in 1957 and helped the company build its first public relations department. In this article he explains that Johnson & Johnson simply turned to their corporate business philosophy, which they call "Our Credo," when determining how to handle the Tylenol situation. Foster discusses that although, at the time of the crisis, corporate planning groups were including crisis management in their preparations for a healthy business environment, no crisis management plan would have been appropriate to tackle the Tylenol poisonings. This is because no management could ever be prepared for a tragedy of this scale. So, Johnson & Johnson turned to their credo for help. "It was the credo that prompted the decisions that enabled us to make the right early decisions that eventually led to the comeback phase," said David R. Clare, president of Johnson & Johnson at the time. (Foster, 2) The credo was written in the mid-1940's by Robert Wood Johnson, the company's leader for 50 years. Little did Johnson know, he was writing an outstanding public relations plan. Johnson saw business as having responsibilities to society that went beyond the usual sales and profit incentives. In this respect, Foster explained, Johnson outlined his company's responsibilities to: "consumers and medical professionals using its products, employees, the communities where its people work and live, and its stockholders." Johnson believed that if his company stayed true to these responsibilities, his business would flourish in the long run. He felt that his credo was not only moral, but profitable as well. As the Tylenol crisis began and became more serious as the hours went by, Johnson & Johnson top management turned to the credo for guidance. As the credo stressed, it was important for Johnson & Johnson to be responsible in working for the public interest. The public and medical community was alerted of the crisis, the Food and Drug Administration was notified, and production of Tylenol was stopped. The first important decision, that put Johnson & Johnson's public relations program in the right direction, was made immediately by the public relations department with complete support from the management. This decision was for the company to cooperate fully with all types of news media. It was crucially important because the press, radio, and television were imperative to warning the public of the ensuing

danger. Without the help of the media, Johnson and Johnson's program would have been completely ineffective. (Foster, 3) From this point on, the media did much of the company's work. Queries from the press about the Tylenol crisis were beyond 2,500. Two news clipping services found over 125,000 news clippings on the Tylenol story. One of the services claimed that this story had been given the widest US news coverage since the assassination of President John F. Kennedy. The television and news coverage on the crisis was just as extensive. (Foster, 3) It is clear that the media played a huge role in Johnson & Johnson's public relations campaign following the seven deaths by cyanide-laced Extra-Strength Tylenol capsules. If the company had not fully cooperated with the media, they would have, in turn, received much less positive media coverage. Disapproving coverage by the media could have easily destroyed Tylenol's reputation permanently. By creating a public relations program that both protected the public interest and was given full support by media institutions in the US, Johnson & Johnson was able to recover quickly and painlessly from possibly the greatest crisis ever to hit the pharmaceutical industry.

REFERENCES 1. Atkinson, Rick. "The Tylenol Nightmare: How a Corporate Giant Fought Back." The Kansas City Times. November 12, 1982. 2. Beck, Melinda, Mary Hagar, Ron LaBreque, Sylvester Monroe, Linda Prout. "The Tylenol Scare." Newsweek. October 11, 1982. 3. Broom, Glen M., Allen H. Center, Scott M. Cutlip. Effective Public Relations, Seventh Edition. Prentice-Hall Inc. 1994. 4. Church, George J. "Copycats are on the Prowl." Time. November 8, 1982. 5. Foster, Lawrence G. "The Johnson & Johnson Credo and the Tylenol Crisis." New Jersey Bell Journal. Volume 6, Number 1. 1983. 6. Giges, Nancy. "New Tylenol Package in National Press Debut." Advertising Age Magazine. November 15, 1982. 7. Goodman, Howard. "PR Effort Launches New Tylenol Package." The Kansas City Times. November 12, 1982. 8. Johnson & Johnson. 'The Comeback." A Special Report From the Editors of Worldwide Publication of Johnson & Johnson Corporate Public Relations. 1982. 9. Knight, Jerry. "Tylenol's Maker Shows How to Respond to Crisis." The Washington Post. October 11, 1982. 10. Lewin, Tamar. "Tylenol Posts an Apparent Recovery." New York Times. December, 24, 1982. 11. Tifft, Susan. "Poison Madness in the Midwest." Time. October 11, 1982. 12. "Tylenol Murders." http://www.personal.psu.edu/users/w/x/wxk116/tylenol/

JOHNSON + JOHNSON OUR CREDO We believe our first responsibility is to the doctors, nurses and patients To mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality. We must constantly strive to reduce our costs in order to maintain reasonable prices. Customers’ orders must be serviced promptly and accurately. Our suppliers and distributors must have an opportunity to make a fair profit. We are responsible to our employees, the men and women who work with us throughout the world. Everyone must be considered as n individual. We must respect their dignity and recognize their merit. They must have a sense of security in their jobs. Compensation must be fair and adequate, and working conditions clean, orderly and safe. We must be mindful of ways to help our employees fulfill their family responsibilities. Employees must feel free to make suggestions and complaints. There must be equal opportunity for employment, development And advancement for those qualified. We must provide competent management, And their actions must be just and ethical. We are responsible to the communities in which we live and work and to the world community as well. We must be good citizens – support good works and charities And bear our fair share of taxes. We must encourage civic improvements and better health and education. We must maintain in good order The properly we are privileged to use, Protecting the environment and natural resources. Our final responsibility is to our stockholders. Business must make a sound profit. We must experiment with new ideas. Research must be carried on, innovative programs developed And mistakes paid for. New equipment must be purchased, new facilities provided and new products launched. Reserves must be created to provide for adverse times. When we operate according to these principles, the stockholders should realize a fair return.

APPENDIX E: CASE STUDY – UP AGAINST WALMART

At the world's largest and most profitable retailer, low wages, unpaid overtime, and union busting are a way of life. Now Wal-Mart workers are fighting back. By Karen Olsson

JENNIFER McLAUGHLlN IS 22, has a baby, drives a truck," wears wide-leg jeans and spiky plastic chokers, dyes her hair dark red, and works at Wal-Mart. The store in Paris, Texas—Wal-Mart Supercenter #148—is just down the road from the modest apartment complex where McLaughlin lives with her boyfriend and her one-year-old son; five days a week she drives to the store, puts on a blue vest with "How May I Help You?" emblazoned across the back, and clocks in. Some days she works in the Garden Center and some days in the toy department. The place is frantic, even by the normally fast-paced standards of retailing; often, it seems, there simply aren't enough people around to get the job done. On a given shift McLaughlin might man a register, hop on a mechanical lift to retrieve something from a high shelf, catch fish from a tank, run over to another department to help locate an item, restock the shelves, dust off the bike racks, or field questions about potting soil and lawn mowers. "It's stressful," she says. "They push you to the limit. They just want to see how much they can get away with without having to hire someone else." Then there's the matter of her pay. After three years with the company, McLaughlin earns only $16,800 a year. "And I'm considered high-paid," she says. "The way they pay you, you cannot make it by yourself without having a second job or someone to help you, unless you've been there for 20 years or you're a manager." Because health insurance on the Wal-Mart plan would deduct up to $85 from her biweekly pay check of $550, she goes without, and relies on Medicaid to cover her son, Gage. Complaints about understaffing and low pay are not uncommon among retail workers—but Wal-Mart is no mere peddler of saucepans and boom boxes. The company is the world's largest retailer, with $220 billion in sales, and the nation's largest private employer, with 3,372 stores and more than 1 million hourly workers. Its annual revenues account for 2 percent of America's entire domestic product. Even as the economy has slowed, the company has continued to metastasize, with plans to add 800,000 more jobs worldwide by 2007.

Given its staggering size and rapid expansion, Wal-Mart increasingly sets the standard for wages and benefits throughout the U.S. economy. "Americans can't live on a Wal-Mart pay check," says Greg Denier, communications director for the United Food and Commercial Workers International Union (UFCW). "Yet it's the dominant employer, and what they pay will be the future of working America." The average hourly worker at Wal-Mart earns barely $18,000 a year at a company that pocketed $6.6 billion in profits last year. Forty percent of employees opt not to receive coverage under the company's medical plan, which costs up to $2,844 a year, plus a deductible. As Jennifer McLaughlin puts it, "They're on top of the Fortune 500, and I can't get health insurance for my kid." Angered by the disparity between profits and wages, thousands of former and current employees like McLaughlin have started to fight the company on a variety of fronts. Workers in 27 states are suing WalMart for violating wage-and-hour laws; in the first of the cases to go to trial, an Oregon jury found the company guilty in December of systematically forcing employees to work overtime without pay. The retailer also faces a sex-discrimination lawsuit that accuses it of wrongly denying promotions and equal pay to 700,000 women. And across the country, workers have launched a massive drive to organize a union at Wal-Mart, demanding better wages and working conditions. Employees at more than 100 stores in 25 states—including Supercenter 4-148 in Paris—are currently trying to unionize the company, and in July the UFCW launched an organizing blitz in the Midwest, hoping to mobilize nearly 120,000 workers in Michigan, Kentucky, Ohio, and Indiana. Wal-Mart has responded to the union drive by trying to stop workers from organizing—sometimes in violation of federal labor law. In 10 separate cases, the National Labor Relations Board has ruled that WalMart repeatedly broke the law by interrogating workers, confiscating union literature, and firing union supporters. At the first sign of organizing in a store, Wal-Mart dispatches a team of union busters from its headquarters in Bentonville, Arkansas, sometimes setting up surveillance cameras to monitor workers. "In my 35 years in labor relations, I've never seen a company that will go to the lengths that Wal-Mart goes to, to avoid a union," says Martin Levitt, a management consultant who helped the company develop its antiunion tactics before writing a book called Confessions of a Union Buster. "They have zero tolerance." The retaliation can be extreme. In February 2000, the meat-cutting department at a Wal-Mart in Jacksonville, Texas, voted to join the UFCW—the only Wal-Mart in the nation where workers successfully organized a union. Two weeks after the vote, the company announced it was eliminating its meat-cutting departments in all of its stores nationwide. It also fired four workers who voted for the union. "They held a meeting and said there was nothing we could do," recalls Dotty Jones, a former meat cutter in Jacksonville. "No matter which way the election went, they would hold it up in court until we were old and gray." IF YOU'VE SEEN ONE WAL-MART, you've seen the Paris store, more or less: a gray cinder-block warehouse of a building, with a red stripe across the front, flags on the roof, WAL*MART spelled in large capitals in the center, and the company credos ("We Sell for Less" and "Everyday Low Prices") to the left and the right. Inside, the cavernous store is bathed in a dim fluorescent light that makes the white walls and linoleum look dingy, and on a Friday shortly before Christmas, the merchandise is everywhere: not only in bins and on shelves, but in boxes waiting to be unloaded, or just stationed in some odd corner, like the pine gun cabinets ($169.87) lined up by the rest rooms. Television monitors advertise thermometers and compact discs, Christmas carols play over the audio system, and yet there's a kind of silence to the place, a suspension of ordinary life, as shoppers in their trances drift through the store and fill carts with tubs of

popcorn, a microwave, a chess set, dog biscuits. Here Protestant thrift and consumer wants are reconciled, for the moment anyway, in carts brimming with bargains. The only way to advance, says one former manager, is to work off the clock: "Working unpaid overtime equaled saving your job” Wal-Mart's success story was scripted by its founder, Sam Walton, whose genius was not so much for innovation as for picking which of his competitors' innovations to copy in his own stores. In 1945, Walton bought a franchise variety store in Newport, Arkansas. The most successful retailers, he noticed, were chains like Sears and A&P, which distributed goods to stores most efficiently, lowered prices to generate a larger volume of sales, and in the process generated a lot of cash to finance further expansion. These, in turn, would serve as basic principles of Walton's business. As he explains in his autobiography, Sam Walton, Made in America, he drove long distances to buy ladies' panties at lower prices, recognizing that selling more pairs at four for a dollar would bring greater profits than selling fewer pairs at three for a dollar. The women of northeastern Arkansas were soon awash in underwear, and a discounter was born. Walton opened his first Wal-Mart Discount City in 1962 and gradually expanded out from his Arkansas base. By 1970 Wal-Mart owned 32 outlets; by 1980 there were 276; by 1990, 1,528 in 29 states. The company grew, in no small part, by dint of its legendary frugality—a habit that started with Sam Walton himself, who drove an old pickup truck and shared hotel rooms on company trips and insisted on keeping the headquarters in Arkansas as plain as possible. Payroll, of course, tends to be a rather larger expense than hotel rooms, and Walton kept that as low as he could, too. He paid his first clerks 50 to 60 cents an hour—substantially below minimum wage at the time—by taking questionable advantage of a smallbusiness exemption to the Fair Labor Standards Act. In 1970, Walton fended off an organizing push by the Retail Clerks Union in two small Missouri towns by hiring a professional union buster, John Tate, to lecture workers on the negative aspects of unions. On Tate's advice, he also took steps to win his workers over, encouraging them to air concerns with managers and implementing a profit-sharing program. A few years later, Wal-Mart hired a consulting firm named Alpha Associates to develop a "union avoidance program." Martin Levitt, the consultant who worked on the program, says that Wal-Mart does "whatever it takes to wear people down and destroy their spirit." Each manager, he says, is taught to take union organizing personally: "Anyone supporting a union is slapping that supervisor in the face." The company also encouraged employees to believe in the good intentions of "Mr. Sam," who peppered his autobiography with tributes to his "associates": "If you want to take care of the customers you have to make sure you're taking care of the people in the stores." Yet many Wal-Mart workers allege that the company Walton left behind when he died in 1992 is anything but a benevolent caretaker. “We’re underpaid, and I'm worried about my retirement," says an overnight stacker in Minnesota who asked not to be identified. "I imagine I'll be working until I'm 90." Her daughter works as a stocker too, but after nine years she doesn't make enough to support her children. "She's had to go down to the food bank, and I've sent stuff over for them," her mother says. "They just can't do it." On the job, she adds, workers are forced to scramble to make up for understaffing. "We're short – we have a skimpy crew at night. We’ve got pallets stacked over our heads, and we can't get caught up with all of it.” A quick look around at the store in Paris makes clear what an employee is up against: thousands of items (90,000 in a typical Wal-Mart) that customers are constantly removing from the shelves and not putting back, or putting back in the wrong place, or dropping on the .floor—the store a kind of Augean Stable, with a corps of blue-vested Herculeses trying to keep things clean. (When I mention this to Jennifer McLaughlin, she tells me that's why no one likes to work the 2 a.m. to 11 a.m. shift, because "all it is, is putting stuff

back.") To get the job done, according to the dozens of employee lawsuits filed against the company, WalMart routinely forces employees to work overtime without pay. In the Oregon wage-and-hour case, a former personnel manager named Carolyn Thiebes testified that supervisors, pressured by company headquarters to keep payroll low, regularly deleted hours from time records and reprimanded employees who claimed overtime. In 2000, Wal-Mart settled similar lawsuits involving 67,000 workers in New Mexico and Colorado, reportedly paying more than $50 million. Wal-Mart blames unpaid overtime on individual department managers, insisting that such practices violate company policy. "We rely on our associates," says spokesman Bill Wertz. "It makes no business sense whatsoever to mistreat them." But Russell Lloyd, an attorney representing Wal-Mart employees in Texas, says the company "has a pattern throughout all stores of treating their workers the same way." Corporate headquarters collects reams of data on every store and every employee, he says, and uses sales figures to calculate how many hours of labor it wants to allot to each store. Store managers are then required to schedule fewer hours than the number allotted, and their performance is monitored in daily reports back to Bentonville. To meet the goals, supervisors pressure employees to work extra hours without pay. "I was asked to work off the clock, sometimes by the store manager, sometimes by the assistant manager," says Liberty Morales Serna, a former employee in Houston. "They would know you'd clocked out already, and they'd say, 'Do me a favor. I don't have anyone coming in—could you stay here?' It would be like four or five hours. They were understaffed, and they expected you to work these hours." Wal-Mart has made clear that keeping its stores union-free IS as much a part of its culture as door greeters and blue aprons. When Judy Danneman, a widow raising three children, went to work as an hourly department manager in West Palm Beach, Florida, she quickly realized that she would have to climb the management ladder in order to survive—because, as she puts it, "my kids had this bad habit of eating." The only way to do that, she says, was to work off the clock: "Working unpaid overtime equaled saving your job." When she finally became an assistant manager, Danneman knew she had to enforce the same policy: "I knew for my department managers to get their work done, they had to work off the clock. It was an unwritten rule. The majority of them were single mothers raising children, or else married women with children. It was sad, and it was totally demanding and very draining and very stressful." In fact, more than two-thirds of all Wal-Mart employees are women—yet women make up less than 10 percent of top store managers. Back when she was first lady of Arkansas, Hillary Clinton became the first woman appointed to the Wal-Mart board, and tried to get the company to hire more women managers, but that effort apparently went the way of national health insurance. Wal-Mart today has the same percentage of women in management that the average company had in 1975. Attorneys representing workers contend that Wal-Mart is too tightly controlled from headquarters in Arkansas to claim ignorance of what's happening in its stores. "In Bentonville they control the air conditioning, the music, and the freezer temperature for each store," says Brad Seligman, a lawyer with the Impact Fund, a nonprofit legal organization in Berkeley. "Most companies divide stores into regions, and then you have a home office of senior management. At Wal-Mart, the regional managers are based in Bentonville; they're on the road Sunday to Wednesday, and then back meeting with management Thursday to Saturday. They're the ones who make the fundamental employee decisions—and the home office knows exactly what they are doing."

The company insists it adequately trains and promotes female managers. But in 2001, a Wal-Mart executive conducted an internal study that showed the company pays female store managers less than men in the same position. "Their focus at Wal-Mart has always relentlessly been on the bottom line and on cost cutting," says Seligman. "Virtually every other consideration is secondary—or third or fourth or fifth." TO PROTECT THE BOTTOM LINE Wal-Mart is as aggressive at fighting off unions as it is at cutting costs. Employees approached by co-workers about joining a union are "scared to even talk," says Ricky Braswell, a "greeter" at the store in Paris. "They're afraid they'll lose their jobs." In Paris, it was Jennifer McLaughlin's boyfriend, 21-year-old Eric Jackson, who first started talking about a union. Raised by a mother who works in a factory, Jackson always assumed he would find a job after high school rather than go on to college. But the few factory jobs in Paris are highly sought after, so Jackson wound up at Wal-Mart, which employs 350 people out of a local workforce of only 22,000. "People ain't got no other place to go," he says. "There's no other jobs to be had." Jackson started as an evening cashier earning $5.75 an hour, and it wasn't long before he was regularly asked to perform the duties of a customer service manager, supervising the other cashiers and scheduling their breaks. He asked for a promotion, but three months later he was still doing the extra work for no extra pay. "I took it because I wanted more money, but I never got the raise," Jackson says. "They knew they could do it to me." He fought for the promotion and eventually won, but by then he had already contacted a local union office about organizing the store. "When Eric first suggested it, I looked at him like he was on crack," says McLaughlin. "I said, 'You can't take down a company like Wal-Mart with a union.'" Nevertheless, Jackson arranged for a UFCW organizer to come to Paris and meet with a small group of workers one June afternoon at the Pizza Inn. But the company soon caught wind of the organizing effort. As one worker left an early meeting of union supporters, he spotted a Wal-Mart manager in the parking lot. From then on, workers seen as pro-union were watched closely by management. "By the time we had our first meeting, they were holding their first anti-union meeting," says McLaughlin. The response came straight from the company's union-avoidance playbook: Troops from the Bentonville "People Division" were flown in, and employees were required to attend hour-long meetings, where they were shown anti-labor videos and warned about unions. "They tend to treat you like you're simple, and they use real bad scare tactics," says McLaughlin. Those who supported the union, she says, were told, "Some people just don't belong at Wal-Mart." McLaughlin isn't shy about speaking her mind, and in the meeting she confronted one of the men from the People Division. "Let me tell you, I used to have epilepsy," she told him. "My dad was in a union, and we had health insurance, and I got better. I don't have health insurance. If my child got epilepsy, what would I do? Doesn't a union help you to get company-paid insurance?" The man, she recalls, became flustered. "Jennifer, I don't have an answer about that," he said. "I'll have to get back with you." The meetings were just the beginning. "The videos and group meetings are the surface cosmetics," says Levitt, the former consultant. "Where Wal-Mart beats the union is through a one-on-one process implemented from Bentonville. They carefully instruct management to individually work over each employee who might be a union sympathizer." In Paris, Eric Jackson was called into a back room by five managers and made to watch an anti-union video and participate in a role-playing exercise. "I was supposed to be a manager, and one of them was the associate who came to me with a question about a union," says Jackson. "So I quoted the video. I said, 'We do not believe we need a union at Wal-Mart,' and they were

like, 'Good, good!' and then I said, 'We're not anti-union— we're pro-associate,' just like I'm supposed to say." Before the onslaught by the company, says McLaughlin, she talked to more than 70 workers at the Paris store who were prepared to sign cards calling for a vote on union representation, but that number quickly dwindled. Those who'd signed cards felt they were being watched. "All of a sudden the cameras start going up," says Chris Bills, who works in the receiving area. "Now there's three in receiving. This one manager took up smoking so he could sit with us on our breaks." Other hourly employees learned for the first time that they were actually counted as managers. "They said we were considered management, so we shouldn't get involved with the union stuff," says Dianne Smallwood, a former customer service manager who worked at the store seven years. Employees opposed to the union were given "pro-associate" buttons to wear, while managers amended the dress code to exclude T-shirts with any kind of writing on them, apparently to prevent workers from wearing union shirts. Wal-Mart declined to let Mother Jones interview store managers or representatives from the People Division in Bentonville, but says it sends out people from corporate headquarters "to answer questions associates may have and to make sure that all store personnel are aware of their legal requirements and meet those requirements exactly." But the company has also made clear that keeping its stores union-free is as much a part of Wal-Mart culture as door greeters and blue aprons. "Union representation may work well for others," says Cynthia Illick, a company spokeswoman. "However, it is not a fit for Wal-Mart." With the company so determined to ward off unions, the prospects of employees in towns like Paris, Texas, winning significant improvements in wages and working conditions seem awfully slim. "It's a long process," Jennifer McLaughlin concedes. "I wish it could be done in the next year, but people come and go, and for every one union card you get signed, two other ones who signed cards have gotten fired or left. It's real frustrating, and a lot of times I don't want to do it no more. But I'm not going to give up until I end up leaving the store." In the end, the success of the organizing drives may depend on labor's ability to mobilize more than just store employees. "We'll never bring Wal-Mart to the table store by store," says Bernie Hesse, an organizer for UFCW Local 789 in Minneapolis. "I can get all the cards signed I want, and they'll still crash us. They'll close the frigging store, I'm convinced. We've got to do it in conjunction with the community." That means going to small businesses and religious leaders and local officials, he says, and convincing them that it's in their interest to stand up to Wal-Mart. "As a community we've got to say, 'All right, if you want to come here and do business, here's what you've got to do—you've got to pay a living wage, you've got to provide affordable health insurance." Putting together such a broad initiative can be "like pulling teeth," Hesse says, but the stakes are high. If employees succeed in improving wages and working conditions at the country's largest employer, they could effectively set a new benchmark for service-sector jobs throughout the economy. Some 27 million Americans currently make $8.70 an hour or less—and by the end of the decade, Hesse notes, nearly 2 million people worldwide will work at Wal-Mart. "These are the jobs our kids are going to have," he says. Karen Olsson, a former editor for the Texas Observer, writes primarily about labor and politics for such publications as Texas Monthly, The Nation, and the Washington Post. From Mother Jones, March/April 2003, pp. 54-S9. © 2003 by Foundation for National Progress.

APPENDIX F: THE REALTOR® CODE OF ETHICS

The REALTOR® Code Effective March 2016

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INDEX PREAMBLE ................................................................................................................................................. 4 THE REALTOR® CODE OF ETHICS.................................................................................................... 5 STANDARDS OF BUSINESS PRACTICE .......................................................................................... 6 1.

Informed of Essential Facts .................................................................................................. 6

2.

Disclosure of Role - Agency ................................................................................................. 6

3.

Primary Duty to Client............................................................................................................ 7

4.

Discovery of Facts .................................................................................................................... 8

5.

Written Service Agreements ................................................................................................ 8

6.

Written Transaction Agreements ....................................................................................... 9

7.

Expenses Related to the Transaction ............................................................................... 9

8.

Disclosure of Benefits to Clients ....................................................................................... 10

9.

Disclosure of Benefits to Customers ............................................................................... 10

10. Outside Professional Advice ............................................................................................... 10 11. Personal Interest in Property............................................................................................. 11 12. Skilled and Conscientious Service ................................................................................... 11 13. Advertising - Content/Accuracy........................................................................................ 12 14. Advertising Listings of Other REALTORS® .................................................................... 13 15. Advertising Claims ................................................................................................................. 13 16. Discrimination .......................................................................................................................... 14 17. Compliance with Board/ Association Bylaws ............................................................... 14 18. Compliance with Statutory Requirements .................................................................... 15 19. Discrediting another Registrant ........................................................................................ 15 20. Respecting Contractual Relationships ............................................................................ 16 21. Conduct Unbecoming ............................................................................................................ 16 22. Principal (Broker) Responsibility ...................................................................................... 17 23. Cooperation with Board/Association ............................................................................... 18 24. Arbitration ................................................................................................................................. 18 25. Inter-Board and Inter-provincial Arbitration ............................................................... 19 26. Avoid Controversies .............................................................................................................. 19 27. CREA Trademarks .................................................................................................................. 20 28. Intellectual Property Rights of Boards/ Associations ............................................... 21 29. REALTOR® Acting as Principal ........................................................................................... 21 DEFINITIONS ......................................................................................................................................... 22 3

PREAMBLE Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. Through the REALTOR®, the land resource of the nation reaches its highest use and private land ownership its widest distribution. The REALTOR® is instrumental in moulding the form of his or her community and the living and working conditions of its people. Such functions impose grave social responsibilities which REALTORS® can meet only by diligent preparation, and considering it a civic duty to dedicate themselves to the fulfillment of a REALTOR®’s obligations to society. The REALTOR® Code of The Canadian Real Estate Association (CREA) is universally recognized by real estate professionals and consumers alike as the measure of professionalism in real estate. The REALTOR® Code is intended to define the high standard of performance the public has a right to expect from those licensed to display the REALTOR® trademark. In the same manner that the real estate marketplace is a dynamic, demanding environment, so the REALTOR® Code is, has been, and will continue to be a demanding document; a plan for professionalism in real estate, capable of including and accommodating every change, challenge and controversy which arises. Since 1913, when the first Code of Ethics was approved by the National Association of Real Estate Boards, it has bound REALTORS® together in a common continuing quest for professionalism through ethical obligations based on honesty, integrity, fairness, accountability and professionally competent service. The REALTOR® Code has been amended many times over the years to reflect the changing needs of the public and the values of society, and to act as an assurance of higher professional standards. Any charge filed shall read as a violation of the REALTOR® Code and/or one or more of the Articles of the Standards of Business Practice. An Interpretation may only be cited in support of the charge or the defence. Penalties for violation of the REALTOR® Code shall be established by the local board or other body authorized to conduct discipline proceedings.

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THE REALTOR® CODE OF ETHICS

The exclusive designation for a member of The Canadian Real Estate Association is the trademark REALTOR®. It symbolizes a commitment to competence, service and professional conduct. In the quest for these high standards, REALTORS® in Canada have been bound together by a Code of Ethics since 1959. As REALTORS®, we accept a personal obligation to the public and to our profession. The Code of Ethics of The Canadian Real Estate Association embodies these obligations. As REALTORS®, we are committed to:

 

Professional competent service

Absolute honesty and integrity in business dealings  



Utmost civility

Co-operation with and fairness to all

Personal accountability through compliance with CREA’s Standards of Business Practice.

To meet their obligations, REALTORS® pledge to observe the spirit of the Code in all of their activities and conduct their business whether personally or through employees, associates or others in accordance with the Standards of Business Practice and the Golden Rule —

“Do unto others as you would have them do unto you.”

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STANDARDS OF BUSINESS PRACTICE 1.

Informed of Essential Facts

ARTICLE

INTERPRETATION

A REALTOR® shall be informed regarding the essential facts which affect current market conditions.

1.1 A REALTOR® shall be aware of current legislation and, wherever reasonably possible, be aware of pending legislation (including zoning, government programs, etc.) which could affect trading conditions in the marketplace. (Also applies to Article 4.) 1.2 A REALTOR® should attend educational programs and courses which will assist the REALTOR® in remaining up-to- date and aware of matters that could affect any aspect of a real estate transaction. 1.3 A REALTOR® shall be aware of appropriate financing procedures, mortgaging requirements, etc. in order to properly discuss financial obligations on any transaction. 1.4 A REALTOR® shall be familiar with the contents of the most current forms commonly used in real estate transactions.

2.

Disclosure of Role - Agency

ARTICLE

INTERPRETATION

A REALTOR® shall fully disclose in writing to, and is advised to seek written acknowledgement from, his or her Clients and those Customers who are not represented by other Registrants regarding the role and nature of the service the REALTOR® will be providing. This disclosure shall be made at the earliest possible opportunity and in any event prior to the REALTOR® providing professional services which go beyond providing information as a result of incidental contact by a consumer.

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3.

Primary Duty to Client

ARTICLE

INTERPRETATION

A REALTOR® shall protect and promote the interests of his or her Client. This primary obligation does not relieve the REALTOR® of the responsibility of dealing fairly with all parties to the transaction.

3.1 A REALTOR® shall fully disclose to his or her Client at the earliest opportunity any information that relates to the transaction. 3.2 A REALTOR® shall not intentionally mislead anyone as to any matters pertaining to a property. 3.3 A REALTOR® shall not, during or following the relationship with his/her Client, reveal Confidential Information of the Client. 3.4 A REALTOR® shall not use any information of the Client to the Client’s disadvantage. 3.5 In a competing offer situation, a listing REALTOR® acting as a dual agent shall not use the information contained in another offer to put either client at a competitive advantage. 3.6 A REALTOR® shall, at all times, be able to render a proper accounting to the REALTOR®’s Client with respect to monies and other property of the Client which have been entrusted to the care of the REALTOR®. 3.7 A REALTOR® shall provide competent assistance when dealing with lawyers, mortgage lenders and other third parties needed to ensure the successful completion of any contract entered into between a Seller and a Buyer. 3.8 An individual REALTOR® representing more than one Buyer on the same property shall disclose this fact to each Buyer and shall not use the information contained in another offer to put either client at a competitive advantage. 3.9 “Dealing fairly” means acting honestly and professionally. The obligation to deal fairly does not in any way reduce a REALTOR®’s obligation to fulfill his or her fiduciary duties to a Client and follow the Client’s lawful instructions.

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4.

Discovery of Facts

ARTICLE

INTERPRETATION

A REALTOR® has an obligation to discover facts pertaining to a property which a prudent REALTOR® would discover in order to avoid error or misrepresentation.

4.1 This Article applies equally to REALTORS® working with Buyers or Sellers. 4.2 This Article is not intended to increase the disclosure obligations of REALTORS® beyond those required by common or civil law or any other statutory or regulatory requirements. 4.3 The REALTOR® shall not be party to any agreement in any way to conceal any facts pertaining to a property. 4.4 Interpretations 1.1 & 3.2 also apply to Article 4.

5.

Written Service Agreements

ARTICLE

INTERPRETATION

A REALTOR® shall ensure that all Service Agreements with consumers with the exception of Service Agreements with Buyers are in writing in clear and understandable language, expressing the specific terms, conditions, obligations and commitments of the parties to the agreement.

5.1 Written agreements should be signed at the earliest possible opportunity and in any event prior to any offer to Purchase being presented or submitted. 5.2 Before entering into a Dual Agency, a REALTOR® shall have the parties’ consent in writing to this form of representation by executing a Dual Agency agreement clearly setting out the duties owed by the REALTOR® to each Client. 5.3 Contracts entered into electronically shall be considered to be “in writing” for the purpose of this Article, provided such contracts comply with the requirements of applicable legislation. 5.4 A REALTOR® shall, prior to signing, provide the necessary explanations to enable a Client to understand the terms and conditions of a contract. 5.5 A REALTOR® shall ensure that documents pertaining to the Listing of real estate or to a Buyer agency relationship are kept current through the use of written extensions or amendments.

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ARTICLE

INTERPRETATION 5.6 A REALTOR®, on entering into a Listing or other service contract with a Seller, shall discuss and disclose to the Seller the amount of Compensation offered to co-operating brokers. 5.7 REALTORS® should make reasonable efforts to ensure that Service Agreements with Buyers are signed, and are required to do so in those jurisdictions that mandate written agreements.

6.

Written Transaction Agreements

ARTICLE

INTERPRETATION

REALTORS® shall ensure that agreements regarding real estate transactions are in writing in clear and understandable language, expressing the specific terms, conditions, obligations and commitments of the parties to the agreement. A copy of each final agreement shall be furnished to each party upon their signing or initialing, and shall be dealt with in accordance with the instructions of the parties involved.

6.1 Where the distribution of contracts is regulated by the By-Laws and/or Rules and Regulations of the Board or by provincial regulations, such distribution shall be in accordance with the requirements of those By-Laws and/ or Rules and Regulations. 6.2 REALTORS® shall ensure that documents pertaining to the Purchase or Sale of real estate are kept current through the use of written extensions or amendments. 6.3 Interpretations 1.4 & 5.3 also apply to Article 6.

7.

Expenses Related to the Transaction

ARTICLE

INTERPRETATION

A REALTOR® shall, prior to the signing of any agreement, fully inform the signing party regarding the type of expenses directly related to the real estate transaction for which that party may normally be liable.

7.1 In explaining fees for services, the REALTOR® shall not state or suggest that the type or level of fees is based on direction from a real estate Board, Association, Institute, Society or Council to which the REALTOR® belongs. 7.2 A REALTOR® shall be fully conversant with the routine type of expenses that a Seller and/or Buyer may incur.

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8.

Disclosure of Benefits to Clients

ARTICLE

INTERPRETATION

REALTORS® shall:

8.1 Without limiting the generality of Article 8, reference to real estate products or services includes lending institutions, title insurance companies, lawyers, appraisers and moving companies, and other real estate brokerage firms from which the REALTOR® may receive a referral fee.

(a) obtain the consent of their Clients prior to: (i) accepting Compensation from more than one party to a transaction, or (ii) accepting any rebate or profit on expenditures made for a Client. (b) disclose to their Clients any financial or other benefit the REALTOR® or his/her firm may receive as a result of recommending real estate products or services to that party.

9.

Disclosure of Benefits to Customers

ARTICLE

INTERPRETATION

REALTORS® shall disclose to Customers:

9.1 The REALTOR® should not recommend or suggest to a party the use of services or products of any other organization or business in which the REALTOR® has a direct or indirect interest without disclosing such interest in writing at the time of the recommendation or suggestion.

a) any financial or other benefit the REALTOR® or his/her firm may receive as a result of recommending real estate products or services to that party.

9.2 Interpretation 8.1 also applies to Article 9.

b) any rebate or profit accepted by the REALTOR® or his/her firm for expenditures made for that party.

10.

Outside Professional Advice

ARTICLE

INTERPRETATION

The REALTOR® shall encourage parties to a transaction to seek the advice of outside professionals where such advice is beyond the expertise of the REALTOR®.

10.1 Outside professional advice would include, without limitation, lawyers, appraisers, home inspectors, surveyors, accountants, insurance agents or brokers, mortgage consultants, land use planners and environmental consultants.

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11.

Personal Interest in Property

ARTICLE

INTERPRETATION

A REALTOR® shall not buy or sell, or attempt to buy or sell an interest in property either directly or indirectly for himself or herself, any member of his or her Immediate Family, or any entity in which the REALTOR® has a financial interest, without making the REALTOR®’s position known to the buyer or seller in writing.

11.1 Disclosure of the REALTOR®’s position shall include the fact that the REALTOR® is a licensed real estate practitioner, the nature of the interest held (when selling), the relationship of the REALTOR® to the Immediate Family member, and/or the fact that the REALTOR® has a financial interest in the buying or selling entity. 11.2 This disclosure must be made regardless of the location of the property in question and regardless of whether the REALTOR® in question is represented by another registrant. 11.3 Where disclosure regarding the Purchase or Sale is also required pursuant to provincial regulation, such additional disclosure shall be made in accordance with that regulation. 11.4 Disclosure pursuant to Article 11 shall be made at the earliest possible opportunity, and in any event prior to the presentation of an offer to Purchase. 11.5 When in doubt, disclose.

12.

Skilled and Conscientious Service

ARTICLE

INTERPRETATION

A REALTOR® shall render a skilled and conscientious service, in conformity with standards of competence which are reasonably expected in the specific real estate disciplines in which the REALTOR® engages. When a REALTOR® is unable to render such service, either alone or with the aid of other professionals, the REALTOR® shall not accept the assignment or otherwise provide assistance in connection with the transaction.

12.1 Where a REALTOR® lacks sufficient expertise, he or she may only provide the service with the assistance of another professional who is properly qualified. 12.2 A REALTOR® shall not provide an Opinion of Value if it is outside the REALTOR®’s field of expertise to do so unless this fact is disclosed in writing to the Client or assistance is obtained from another Person who has experience in this area. 12.3 A REALTOR® shall not perform an Appraisal or Opinion of Value on a property in which the

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ARTICLE

INTERPRETATION REALTOR® has a present or contemplated interest without first disclosing this fact to the Client. 12.4 Fees charged for Appraisals or Opinions of Value shall not be based on the amount of value reported. 12.5 A REALTOR® shall not perform an Appraisal unless he or she has the appropriate training.

13.

Advertising - Content/Accuracy

ARTICLE

INTERPRETATION

All Advertising and promotion of properties shall accurately reflect property and other details and prominently display the name of the brokerage and any additional information required by provincial regulation.

13.1 REALTORS® shall not advertise or permit any person employed by them or otherwise affiliated with them to advertise real estate services or property without disclosing the name of the REALTOR®’s brokerage in a readily apparent fashion. If disclosing the name of the REALTOR®’s brokerage is impractical because of the nature of the display (e.g. text message, tweet, etc…) then no such disclosure is required, provided there is a link to a display that includes all of the required disclosures. 13.2 The Internet website of a REALTOR® is an Advertising vehicle. In the event of a multiple page website, every page is an Advertising vehicle. All properties displayed and all representations made on a website must comply with the REALTOR® Code as well as applicable provincial, federal and any other requirements regarding Advertising. 13.3 The advertised or offered price shall not be other than that which was agreed upon in writing with the Seller.

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14.

Advertising Listings of Other REALTORS®

ARTICLE

INTERPRETATION

REALTORS® may only advertise a property if such Advertising has not been restricted at the request of the Seller and is in accordance with provincial and federal regulations.

14.1 Listing brokerages may permit the Advertising of their properties by other brokerages when authorized in writing by the Seller to do so. 14.2 Virtual Office Websites (VOWs), Internet Data Exchange Websites (IDXs) and any other similar sites or technologies which display properties of other REALTORS® shall be subject to all applicable laws, and be operated in accordance with the rules established by the appropriate real estate board(s) for such sites. 14.3 Interpretation 13.1 also applies to Article 14, unless otherwise agreed upon in writing.

15.

Advertising Claims

ARTICLE

INTERPRETATION

Claims or offerings in Advertising must be accurate, clear and understandable.

15.1 Advertising of Compensation shall include the details of services provided and whether any additional charges may apply. If the services to be provided for the advertised Compensation do not include listing on a Board’s MLS® System, a statement to that effect must be included. 15.2 Representations of performance (e.g. “#1,” “top-selling,” etc.) must include the geographical area referred to, the relevant time-frame (e.g. January-June 2004) and the source or basis on which the claim is based (e.g. based on the number of sales on the MLS® system of the relevant Board for the specified time period). 15.3 Advertising of programs, initiatives or guarantees (e.g. “Buy a house with 0% down, ”If I don’t sell your house, I will buy it from you,” ) must clearly set out all significant details of how the program works, including, but not limited to, exceptions and time frames. 15.4 Significant conditions, restrictions, limitations and additional charges shall be fully and 13

ARTICLE

INTERPRETATION prominently displayed in the body of the advertisement near the claim or offering in easily readable form and shall comply with all applicable laws. 15.5 A condition, restriction, limitation or additional charge shall be considered “significant” if it would likely affect a consumer’s decision to retain the REALTOR®/brokerage. 15.6 Any claims or offerings in advertising must also comply with all applicable laws, including the Competition Act. 15.7 Interpretation 13.2 Applies to Article 15.

16.

Discrimination

ARTICLE

INTERPRETATION

The REALTOR® shall not deny professional services to or be a party to any plan to discriminate against any Person for reasons of race, national or ethnic origin, religion, colour, sex, family status, age, gender identity, or sexual orientation, marital status or disability.

16.1 REALTORS® must comply with applicable human rights legislation.

17.

Compliance with Board/ Association Bylaws

ARTICLE

INTERPRETATION

The REALTOR® shall abide by the By-Laws, Rules, Regulations and policies established by the REALTOR®’s Real Estate Board, Provincial/Territorial Association, and The Canadian Real Estate Association (CREA).

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18.

Compliance with Statutory Requirements

ARTICLE

INTERPRETATION

The business of a REALTOR® shall be conducted in strict accordance with all statutory and regulatory requirements.

18.1 A board may only charge a REALTOR® under this Article once he or she has been found to have violated a statute or regulation by the body duly authorized to make such a determination. 18.2 A certificate of conviction or other proof of non-compliance issued by a duly authorized body may be relied on by a board as evidence of noncompliance with this Article. 18.3 Nothing in this Article prevents a board from initiating discipline proceedings where the conduct which is the subject of charges under other statutes or regulations may also constitute a violation of the REALTOR® Code.

19.

Discrediting another Registrant

ARTICLE

INTERPRETATION

The REALTOR® shall never publicly discredit any other Registrant. If the REALTOR®’s opinion is sought, it should be rendered with strict professional integrity and courtesy.

19.1 The REALTOR® shall not comment in a derogatory manner in any communication or medium, including social media, as to the capacity, integrity, or competence of any other Registrant. 19.2 Where any REALTOR® is asked to comment on a specific transaction or the business practices of another Registrant, such comments should be given with strict professional integrity, objectivity and courtesy. 19.3 This Article does not apply to truthful Advertising by REALTORS®. Any Advertising by a REALTOR® which contains seemingly derogatory statements about other Registrants or competitors, their businesses or their business practices may form the basis of an ethics charge only if such statements are false or misleading within the meaning of the Competition Act, or are otherwise prohibited by law.

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20.

Respecting Contractual Relationships

ARTICLE

INTERPRETATION

The agency or other contractual relationship of a Registrant shall be respected by all REALTORS®. Negotiations regarding an offer or the acceptance of an offer with any party who is exclusively represented shall be carried on with the Registrant representing the party except with the consent of the Registrant.

20.1 A REALTOR® should not in any manner, by specific direction or suggestion, advise a party to a contract that the party should attempt to breach the contract. 20.2 Prior to the expiry of an existing listing/buyer agency agreement, a REALTOR® may enter into a Listing agreement with a seller for the same property or a buyer agency agreement with the same buyer provided the following conditions are met: (a) Any communication with the seller/buyer: (i) may be initiated by the seller/buyer; or (ii) if initiated by the REALTOR® must comply with Board Bylaws/Rules concerning solicitation and any applicable provincial or federal legislation or regulation; and (b) any new Listing agreement for the property or buyer agency agreement with the buyer shall not commence until the expiry of the current Listing/buyer agency agreement.

21.

Conduct Unbecoming

ARTICLE

INTERPRETATION

A REALTOR® shall not engage in conduct that is disgraceful, unprofessional or unbecoming of a REALTOR®.

21.1 This Article is intended to deal with conduct that, having regard to all of the circumstances, is egregious in nature and goes beyond simple error. 21.2 “Conduct” in this Article is not restricted to conduct in the course of providing real estate services.

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22.

Principal (Broker) Responsibility

ARTICLE

INTERPRETATION

The principal of a brokerage is required to supervise and control the activities of the REALTOR® and other personnel for whom he/she is responsible.

22.1 ”Principal” means the individual designated as the representative of the firm, either for the purposes of the provincial real estate licensing legislation or with regard to the relationship between the brokerage and the local real estate Board/Association. 22.2 In determining the adequacy of supervision, all relevant factors may be considered, including, but not limited to: (a) whether the brokerage had established written policies and procedures which were provided to all REALTORS® and other personnel; (b) whether office activities were regularly reviewed and updated to ensure that the policies and procedures were current and were being properly implemented; (c) whether the principal had undertaken all reasonable steps to ensure compliance by all REALTORS® and other personnel; (d) whether each transaction was reviewed by the principal, including trust deposits, sales record sheets, Listing and sales contracts and (e) whether the principal took remedial action when a violation by a REALTOR® or other personnel was discovered; (f) whether the brokerage regularly informed or updated the firm REALTORS® and other personnel on changes in legislation, rules and regulations or other relevant issues.

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23.

Cooperation with Board/Association

ARTICLE

INTERPRETATION

Should a REALTOR® be asked to co-operate in any way in connection with a disciplinary investigation or proceeding, the REALTOR® shall place all pertinent facts before the proper Committee of whichever real estate board or association is conducting the investigation or proceeding.

23.1 A REALTOR® who is being investigated for alleged unethical conduct should provide the appropriate Committee, upon request, with all materials and information in the REALTOR®’s possession in connection with the matter being investigated. 23.2 Where a REALTOR® is asked to assist the appropriate Committee in connection with a disciplinary investigation or proceeding involving another REALTOR®, the REALTOR® should provide all relevant materials and information in that REALTOR®’s possession, and be prepared to testify at any hearing of the matter. Such assistance should not be deemed a “controversy” within the meaning and intent of Article 26. 23.3 Where a REALTOR® has reasonable and probable grounds to believe: (a) that another REALTOR® has apparently breached the REALTOR® Code, and (b) that a person will likely suffer serious damage as a consequence of the apparent breach, the REALTOR® should immediately report the apparent breach to the appropriate Board in writing with the reporting REALTOR®’s name, address and telephone number. The report should be made bona fide without malice or ulterior motive.

24.

Arbitration

ARTICLE

INTERPRETATION

In the event of a dispute between REALTORS® associated with different brokerages of the same local Board/Association regarding the Compensation earned or to be earned in connection with a real estate transaction, the dispute shall be submitted for arbitration in accordance with the By-Laws, Rules and Regulations of their local Board/Association.

24.1 A dispute between REALTORS® which is properly submitted for arbitration pursuant to this Article should not be deemed a “controversy” within the meaning and intent of Article 26. 24.2 Where a REALTOR® fails to submit a dispute to arbitration in accordance with the applicable ByLaws and Rules and Regulations, this Article may 18

ARTICLE

INTERPRETATION be pleaded as a defence in any other action or proceeding. 24.3 This Article does not require REALTORS® to arbitrate when all parties to the dispute advise their Board/Association in writing that they choose not to arbitrate before the Board/Association.

25.

Inter-Board and Inter-provincial Arbitration

ARTICLE

INTERPRETATION

In the event of a dispute between REALTORS® associated with different brokerages and belonging to different local Boards/Associations, regarding the Compensation earned or to be earned in connection with a real estate transaction, the dispute shall be submitted to arbitration in accordance with the By- Laws and Rules and Regulations of the appropriate Provincial/Territorial Association. Should the REALTORS® belong to different Provincial/Territorial Associations, the dispute shall be arbitrated in accordance with the By-Laws and Rules and Regulations of The Canadian Real Estate Association.

25.1 Interpretations 24.1, 24.2 and 24.3 also apply to Article 25.

26.

Avoid Controversies

ARTICLE

INTERPRETATION

The business of a REALTOR® shall be conducted so as to avoid controversies with other REALTORS®.

26.1 Any REALTOR® who is aware of or involved in a controversy with another REALTOR®, resulting from the alleged misconduct or impropriety of that other REALTOR®, should place such matters before the appropriate Committee for resolution in order that the matter may be resolved in accordance with the Rules and Regulations of the Board, Association, Society or Council to which the REALTOR® belongs. 26.2 “Controversies,” as used in this Article, does not include aggressive or innovative business practices, which are otherwise ethical and disputes 19

ARTICLE

INTERPRETATION over Compensation or the division of commissions/fees. 26.3 A REALTOR® should not disrupt or obstruct a disciplinary investigation or proceeding relating to the alleged misconduct of another REALTOR®. 26.4 A REALTOR® should not make any unauthorized disclosure or dissemination of allegations, findings or a decision in connection with a disciplinary investigation, hearing or appeal. 26.5 A REALTOR® should not intentionally impede a disciplinary investigation or proceeding by filing multiple complaints based on the same event or transaction.

27.

CREA Trademarks

ARTICLE

INTERPRETATION

A REALTOR® shall only use the trademarks of The Canadian Real Estate Association in accordance with CREA’s rules, regulations and policies.

27.1 A REALTOR® shall not challenge the validity of CREA’s Trademarks. 27.2 A REALTOR® shall not use any of CREA’s Trademarks in domain names or e-mail addresses unless specifically authorized to do so by CREA policies. 27.3 A REALTOR® shall not use, display, or attempt to register as trademarks any word, phrase, term, initials or design marks that incorporate, or are confusingly similar to, any trademark of CREA. 27.4 REALTORS® are responsible for ensuring that buyers and sellers, for whom they are providing any service, as well as any other third parties in any way involved in transactions, do not use CREA’s Trademarks in any unauthorized manner. This obligation includes the requirement to contractually protect CREA’s Trademarks as set out in CREA’s Policies.

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28.

Intellectual Property Rights of Boards/ Associations

ARTICLE

INTERPRETATION

REALTORS® shall respect the intellectual property and other ownership rights of other REALTORS®, Boards, Provincial/Territorial Associations and CREA.

28.1 REALTORS® shall only access and use the websites and other databases of Boards, Associations, CREA and other REALTORS® in accordance with the policies for use established by the owner of the site. 28.2 REALTORS® should not infringe the copyright or other ownership interest of another REALTOR® in his/her Listing. 28.3 A REALTOR® shall not use the trade names or trademarks or confusingly similar trade names or trademarks of any firm, franchise, or other organization other than those with which the REALTOR® is affiliated or otherwise authorized in writing to use. This restriction includes but is not limited to, unauthorized Internet uses such as domain names, e-mail addresses and metatags.

29.

REALTOR® Acting as Principal

ARTICLE

INTERPRETATION

A REALTOR®, when acting as a principal in a real estate transaction, remains obligated by the duties imposed by the REALTOR® Code.

29.1 A REALTOR® is acting as a principal when he or she is buying or selling or attempting to buy or sell an interest in the property either directly, on his or her own behalf or through any entity which the REALTOR® holds any direct or indirect interest.

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DEFINITIONS The following definitions are illustrative only and are intended simply to assist the reader’s understanding of the REALTOR® Code. Throughout this document, words that are defined have been capitalized.

ADVERTISING APPRAISAL BOARD BUYER CLIENT COMPENSATION CONFIDENTIAL INFORMATION CUSTOMER

means any marketing activity to promote the brokerage, the REALTOR® or a transaction and includes any verbal, written or graphic representation in any form, including electronic media. means an opinion of the value of specified interests in, or aspects of, identified real estate based on an analysis of relevant data and performed by persons who have the required training in the preparation of appraisals. means a member local real estate Board/ Association or provincial/territorial association and includes, where appropriate, a compliance body. means a Person acquiring or attempting to acquire an interest in real estate through a Purchase. means a Buyer or a Seller whom a REALTOR® is representing as agent. means the payment to a REALTOR® for services related to a Purchase or Sale and includes commissions, fees and any other form of remuneration or reward for services rendered by a REALTOR®. means any personal or business information relating to the individual that ought to be considered confidential by its nature. means a Buyer or Seller who is not a Client.

CREA’S TRADEMARKS

include, but are not limited to, the words REALTOR® and REALTOR Link®, the REALTOR® and REALTOR Link® logos, Multiple Listing Service®, MLS® and the related MLS® logos.

DUAL AGENCY

means a relationship in which a brokerage or a REALTOR® represents, as agent, more than one party in the same Transaction.

IDX

IMMEDIATE FAMILY

(“Internet Data Exchange”), refers to a reciprocal system whereby consenting brokerages agree to advertise on their Internet websites, each other’s active listings, either from the MLS® database of the board or from REALTOR.ca, subject to the rules of the applicable real estate board and the REALTOR®’s oversight, supervision and accountability. means a spouse, son, daughter, parent, brother or sister and includes persons who are in such categories because of marriage, common law relationships, or adoption as well as entities in which such persons have any direct or indirect financial interest.

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PERSON

means an agreement between a brokerage and a Client granting the brokerage the authority to offer for sale the Client’s real property with defined terms and conditions. A listing on MLS® must involve agency and an offer of compensation to the selling office means an estimate of the value of specified interests in, or aspects of, identified real estate which may be based wholly or partly on comparative market analyses. An Opinion of Value may contain more or less analysis of relevant data than an appraisal and may be performed by a REALTOR®. includes, where applicable, an individual, a partnership, a corporation and any other entity legally capable of buying and selling real estate.

PURCHASE

includes an actual or proposed exchange, option, lease or other acquisition of an interest in real estate.

LISTING

OPINION OF VALUE

REALTOR®

REGISTRANT

is a registered trademark of REALTOR® Canada Inc., a company owned equally by The Canadian Real Estate Association and the National Association of REALTORS® and refers to licensed real estate practitioners who are members of The Canadian Real Estate Association. means a person licensed by a jurisdiction to trade in real estate.

SALE

includes an actual or proposed exchange, option, lease or other disposition of an interest in real estate.

SELLER

means a Person disposing of or attempting to dispose of an interest in real estate by Sale.

SERVICE AGREEMENT VOW

means an agreement that establishes a relationship between a brokerage and a Person which identifies the responsibilities of each party and includes the services to be performed by the brokerage and any compensation payable. (“Virtual Office Website”) refers to a brokerage or REALTOR® Internet website, or a feature of a such Internet website, through which the REALTOR® provides real estate brokerage services to consumers with whom the REALTOR® has first established a broker-consumer relationship, where the consumer has the opportunity to search for MLS® data, either from the MLS® database of the board or from REALTOR.ca, subject to the rules of the applicable real estate board and the REALTOR®’s oversight, supervision and accountability.

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© Copyright The Canadian Real Estate Association 2011-2016 The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. The trademarks MLS®, Multiple Listing Service®, and the associated logos are owned by CREA and identify the quality of services provided by real estate professionals who are members of CREA.