Consultation on REALTOR® Code of Ethics
The reputation of REALTORS® is at risk because of uneven enforcement of the Code of Ethics. The 2018 REALTOR® Code Committee decided to consult on options that will hopefully help achieve consistent national enforcement of the REALTOR® Code.
A summary of results: what we heard
In our consultation with members across the country we heard that there is strong, widespread support for protecting the reputation of the REALTOR® profession by enforcing the REALTOR® Code of Ethics. There are many considerations for enforcement, ranging form who is in charge, to how it is paid for. We presented three possible options directly to REALTOR® members, boards and associations – online and in-person – so that we understood what they valued, what a successful enforcement system would look like, and we heard many important ideas for how to enforce the REALTOR® Code. While there was a wide variety of opinions, there was a strong desire to see meaningful action taken.
The main points we consistently heard were that:
- There needs to be education and communications for both members and the public about the REALTOR® brand and REALTOR® Code. For the REALTOR® brand to mean something in the public’s mind it is important that they understand that REALTORS® follow the REALTOR® Code and can ensure that real estate transactions are fair and ethical.
- The solution needs to be fair and equitable across the country. Canada is a big, diverse place with lots of local differences, both in culture and regulation. The public needs to be confident that REALTORS® are held to the same professional standards from coast to coast to coast. The approach to enforcement needs to both standardize CREA’s approach nationally as well as respect regional differences.
There were other areas where the message was not as consistent, especially between results from the online survey and the in-person meetings. On many issues opinion was divided, and members provided thoughtful insight into the pros and cons of each option. In the online survey, which almost eight thousand REALTORS® across the country participated in, almost 45 per cent favoured a more centralized approach for enforcement at the provincial level. However, more than 25 per cent want to see the Board as the governing body, and 28 per cent wants to maintain the status quo.
Participants were in favour of a centralized body because it is: a more standardized process, transparent, consistent, protects regional variances, has a larger impact, and is cost-effective. Some were against it, fearing it would become too bureaucratic, fail to account for regional differences and may become too complex.
This Spring, CREA will present our proposed approach at our Annual General Meeting. It will reflect what we heard from members and be based on the principles of consistency, fairness and firmness: members will be treated equitably, but local differences will be respected. It will be cost-effective, practical to implement and be supported by strong public and member education and support.
The REALTOR® Code is critical to the reputation of our profession, and uneven enforcement puts us at risk. The need for comprehensive, national approach to ensure that there is enforcement of these ethical standards has been a fundamental challenge for years. Today, uneven enforcement of the REALTOR® Code is contributing to undesirable media attention questioning the ethics of all REALTORS® and is putting the REALTOR® trademark at risk. Damage of the reputation of the profession ultimately damages the reputation of each professional.
That’s why, late last year, we consulted with REALTORS®, board and associations across the country, both in-person and online, to explore options for enforcing the REALTOR® Code.
Our consultation heard from nearly 9,000 members at our in-person meetings and online, and achieved 120,000 impressions online. Three options for enforcement were presented for discussion. They ranged from continuing the status quo but with penalties for boards and associations who do not fulfil their enforcement obligation, to having a real estate body at the provincial or national level become the only entity to receive complaints and enforce the Code.
One of the strongest messages we received was that members care very strongly about their reputations and that of their profession – and understand the importance of the REALTOR® Code that is protecting them.
CREA members also identified other ways that enforcing the REALTOR® Code would benefit them and the profession. They told us that an enforcement program supported by education and communication can reduce the number of unethical agents and practices. This increase in accountability and professionalism will lead to more respect from consumers and improve public perception of the value of our profession. Ultimately, an improved reputation will lead to more business for REALTORS®.
We all rely on our personal networks and the integrity of our work. Members know that any harm to the reputation of REALTORS® can harm these vital relationships with our clients and communities. Members have demonstrated that they understand the value of enforcing the REALTOR® Code to our sector and our profession. With this strong support from members we will be moving forward with a plan to ensure that the REALTOR® Code is enforced, that the trademark has meaning, and that REALTORS® across Canada can be confident that their profession is respected.
Upcoming challenges and opportunities with implementing national enforcement
Our nation-wide consultations revealed that REALTOR® members, boards and associations are strongly in favour of enforcing the REALTOR® Code as a way to enhance the reputation of their profession. While enforcement is an important process, it is not an easy one. We not only need to consider the opportunities, but also the challenges that will be involved in enforcing the Code across different regions.
Consistent enforcement of the REALTOR® Code has the potential to provide positive and meaningful outcomes for the REALTOR® profession. Namely, fewer unethical agents and practices, greater accountability and professionalism, as well as an improved public perception of the value of our profession.
To implement a successful a national enforcement program, we need to first understand the unique challenges and opportunities this process will bring – what it means to REALTOR® members, boards, associations and the public. Some major challenges we heard during our consultation included:
- Governance, in terms of appropriate regional representation, proper training to manage complaints, and concerns with backlogs;
- Public perception, as it relates to credibility, brand recognition and awareness, and the value of the trademark;
- Reluctance to report, in terms of conflict of interests and general lack of awareness of rules;
- Regional differences, in terms of costs, relationship with local and provincial boards, and legislation framework; and,
- Brokerages and costs, in terms of variations of hiring processes and ethics.
On the other side, major opportunities that we heard included:
- Greater flexibility and adaptation, in terms of being more open and transparent;
- Increased member communication and education, as it relates to the process of making complaints and clear guidelines for consequences;
- Public education, in terms of better marketing and branding, and promotion of ethical practices;
- Partnerships and engagement, in terms of adopting and building on best practices from across the country;
- Support for boards who need assistance; and,
- An opportunity to defend REALTORS® who have been unfairly attacked by the media.
While there are ample challenges and opportunities to consider with national enforcement, what we heard was clear: members overwhelmingly support enforcement. With a strong desire to uphold ethical standards and the reputation of the REALTOR® profession, compliance is possible through education and communications.
The final outcome and CREA’s final proposed approach
Through our engagement process, we listened and consulted with REALTORS®, board and associations across the country, both in-person and online. What we consistently heard was that members deeply value not only their reputation as a REALTOR®, but the reputation of the REALTOR® profession. To build confidence and trust with members and the public, reputation means everything. It’s the reason why we took this process very seriously – we wanted to understand the current climate and the opportunities and challenges that lie ahead, so that we could ensure the best solution for everyone.
We heard from real estate boards, associations and individual members that, for consistent, national enforcement to be a success, there needs to be education and communications for both members and the public about the REALTOR® brand and the REALTOR® Code. While there was no clear consensus on approach, we thoroughly reviewed all the feedback to understand what members hoped to achieve and why they felt the way they did. We also spoke with the National Association of REALTORS® (NAR), who own the REALTOR® trademarks in the United States and co-own the REALTOR® trademarks in Canada along with CREA.
The proposed approach that we ultimately arrived at reflects everything we heard and is, we believe, the best way forward for our members and the REALTOR® profession.
We propose two recommendations:
- CREA is the national body that maintains the REALTOR® Code, controls the REALTOR® trademark in Canada, and provides ongoing guidance to ensure the uniform and consistent application of the REALTOR® Code. To implement this approach, the 2018 REALTOR® Code Committee recommended that:
- CREA amend its By-Laws and Rules so that a single entity in each province or territory will be responsible for enforcement of the REALTOR® Code;
- This enforcement is to include processing complaints from REALTORS® and consumers; and
- CREA should allow Boards to present a business case to CREA showing that they have capacity to enforce the REALTOR® Code and to process complaints from REALTORS® and consumers by December 31st, 2020. If approved by CREA, the Board will be permitted to enforce the REALTOR® Code in addition to the enforcement done by the provincial/territorial body. If no business case is presented, or if the business case is not approved by CREA, then enforcement will be the responsibility of the provincial/territorial body.
- The REALTOR® Code Committee recommended amendments to Rules 3 and 10, which will give CREA the ability to address complaints involving a breach of any article of the REALTOR® Code, not just a breach of the article involving trademarks. When processing these complaints CREA will follow the procedure set out in the REALTOR® Code Enforcement Policy. The Policy gives CREA the ability to suspend a member’s use of the REALTOR® trademark or access to CREA services where the member has breached the REALTOR® Code, or who appears to have breached the REALTOR® Code by engaging in conduct that is so egregious it could harm the reputation of REALTORS® and the goodwill associated with the REALTOR® mark.
These recommendations will be tabled and acted on at this year’s AGM in April. If adopted, they will provide the consistent, fair and firm enforcement needed to protect REALTOR®’s relationships in their communities and will ensure that our profession remains respected by our clients and our communities. They will form the basis of a comprehensive, lasting, and cost effective solution to enforcing the REALTOR® Code.
Please take the time to learn about our enforcement options and reach out to ask any questions you may have.
The Policy establishes that CREA will normally only issue penalties against REALTOR® members after a decision has been handed down from a Board, Association, Regulator, or court of law. Only in very rare situations will CREA exercise its authority to issue penalties against a REALTOR® in the absence of such a decision. These are the situations where the conduct complained about is so egregious, such as conduct that is potentially illegal, that the conduct poses risk to the reputation of the REALTOR® profession or otherwise could harm the REALTOR® trademark. Giving CREA this authority will act as a sort of failsafe, that CREA will only exercise in certain circumstances.