A broker asks whether a course of action can be perfectly lawful and still violate the standards of honesty and fair dealing that her professional association enforces against its own members. What body of rules is she asking about?
Correct Answer
A) A professional code of ethics
A professional code of ethics is a voluntary standard of conduct adopted by an association and enforced against its members through the association's own disciplinary process. Because it is aspirational, it commonly demands more than the law requires, which is why conduct can be legal and still be an ethics violation. The remedies also differ: an ethics panel can censure, fine or expel a member, but it cannot revoke a license.
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Related Topics & Key Terms
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Related Concepts
License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
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