On January 1, 2019, a new ethical requirement in the NAR Code of Ethics went into effect. As you know, Realtors® currently have the ethical duty (1) to submit offers and counter-offers objectively and as quickly as possible (Standard of Practice 1-6) and (2) to continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing (Standard of Practice 1-7).
Effective January 1, 2019 if a cooperating broker makes a written request, a listing broker will be ethically obligated to provide EITHER (a) “a written affirmation to the cooperating broker that the offer was submitted to the seller/landlord,” OR (b) “a written notification that the seller/landlord has waived the obligation to have the offer presented.” This new ethical duty is set forth in Standard of Practice 1-7 and is highlighted below:
Standard of Practice 1-7
When acting as listing brokers, REALTORS® shall continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing. Upon the written request of a cooperating broker who submits an offer to the listing broker, the listing broker shall provide a written affirmation to the cooperating broker stating that the offer has been submitted to the seller/landlord, or a written notification that the seller/landlord has waived the obligation to have the offer presented. REALTORS® shall not be obligated to continue to market the property after an offer has been accepted by the seller/landlord. REALTORS® shall recommend that sellers/landlords obtain the advice of legal counsel prior to acceptance of a subsequent offer except where the acceptance is contingent on the termination of the pre-existing purchase contract or lease.
Note the following:
- The cooperating broker’s request must be in writing. This should be interpreted to include email and text.
- If no written request is made, there is no duty to respond. Of course, the duty set forth in (1) and (2) above remains.
- There is no stated time period within which the listing broker must respond. Whether or not the response was made in a reasonable time will be determined by an Ethics Hearing panel if an ethics complaint is filed. Because there is no stated time period, you should make every reasonable effort to respond in writing as promptly as possible.
- In order to defend yourself if an Ethics complaint is filed, you should save a copy of the response. The most effective way to do so is not only to store it electronically where it can be retrieved if necessary, but you should send a copy for the office file and you should maintain a personal copy.
- It remains to be seen whether it will become the custom, when acting as a cooperating broker, to always make a written request. First, there is no specific ethical obligation to make the request. However, if you have reason to believe that the listing agent has not submitted the offer, or if asked by the client, you should do so.