During the 2020 REALTORS® Conference & Expo, held virtually in November, the National Association of REALTORS® Board of Directors approved recommendations from the Professional Standards Committee on the Code of Ethics’ applicability to discriminatory speech and conduct.

These changes can be grouped into three broad categories:

  1. Changes to the Code of Ethics’ applicability to a REALTOR®’s activities.
    Previously, the policy statement in the “Code of Ethics and Arbitration Manual” limited the applicability of the code to real estate–related activities and transactions involving REALTORS®. As such, members could engage in conduct and speech that was discriminatory and abhorrent, but unless it could be tied to a real estate–related activity or transaction, the Code of Ethics—specifically, Article 10—did not apply. The new policy expands the Code of Ethics’ applicability to all of a REALTOR®’s activities.
  2. A new Standard of Practice 10-5.
    This provides that REALTORS® must not use harassing speech, hate speech, epithets, or slurs based on race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.
  3. Revisions to the definition of public trust.
    The definition of “public trust” was expanded to include all discrimination against protected classes under Article 10 of the Code of Ethics and all fraud, and to limit the reporting requirement to final ethics decisions involving real estate–related activities and transactions. Previously, the definition of public trust included demonstrated misappropriation of client or customer funds or property, willful discrimination, or fraud resulting in substantial economic harm. This revision expands the definition to include all discrimination against the protected classes under Article 10 and all fraud.

The Board of Directors also approved enhancements to the Code of Ethics and Arbitration Manual consistent with these three categories.

Why Now?

These are significant changes, and many associations are curious about both the reasoning behind them and the method of enforcement. For context, it is important to note that not only did NAR receive an unprecedented number of complaints in 2020 about REALTORS® using discriminatory speech online, but local and state associations also experienced an increase in complaints.

Many associations struggled to find explicit and direct justification for disciplinary action under either NAR’s Code of Ethics or their own bylaws. NAR’s approved changes should make it clear to members and associations alike that discriminatory speech against protected classes is a violation of the Code of Ethics and is subject to appropriate disciplinary action, even if that discriminatory speech occurs outside a real estate–related activity or transaction.

When it comes to enforcement of these changes, keep a couple of things in mind. First, this doesn’t mean that the Code of Ethics will apply to all portions of a REALTOR®’s personal life. Most articles and standards of practice remain specific to real estate transactions and other real estate–related activities. The focus of these changes is meant to be narrow, applying only to discriminatory speech against the protected classes identified in the Code of Ethics.

Second, the concern has been raised that terms such as “hate speech” or “epithets” can be subjective. To assist associations with the consistent application of these policies, NAR has also adopted a new Appendix XII to Part Four of the Code of Ethics and Arbitration Manual.

NAR will roll out further guidance, including comprehensive training, for associations and members in the coming months. Feel free to contact narpolicyquestions@nar.realtor with any questions.

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