LESSON 4 Flashcards
(28 cards)
Why is it important for real estate professionals to study ethics?
The complexity of the real estate industry, combined with expanded legal responsibility for real estate consultants, makes the study of professional ethics essential to both maintaining a high standard of conduct in the industry and promoting the good reputation of real estate professionals.
NOTE ONLY
Professional ethics are a branch of the science of morals which concerns the daily business conduct of professionals. Written codes contain guidelines voluntarily adopted by members of professional associations as the minimum standard of behaviour necessary to maintain the reputation of the profession as a whole, in the public opinion.
Statutes, such as the Real Estate Services Act, generally set only the minimum standards of conduct required by the law. The codes of conduct and standards of professional associations build upon this foundation, attempting to impose a standard of conduct for real estate professionals which reach a higher moral level than what is merely legal. This is seen as an essential method of attaining public trust and maintaining a profession’s integrity.
NOTE ONLY
Professional ethics are a branch of the science of morals which concerns the daily business conduct of professionals. Written codes contain guidelines voluntarily adopted by members of professional associations as the minimum standard of behaviour necessary to maintain the reputation of the profession as a whole, in the public opinion.
Statutes, such as the Real Estate Services Act, generally set only the minimum standards of conduct required by the law. The codes of conduct and standards of professional associations build upon this foundation, attempting to impose a standard of conduct for real estate professionals which reach a higher moral level than what is merely legal. This is seen as an essential method of attaining public trust and maintaining a profession’s integrity.
F.A.R. Bennion, writing on the topic of professional ethics, has isolated six principal factors which, if present, indicate that an activity is “professional in the strictest sense”.
LIST THE 6 PRINCIPAL FACTORS?
- Academic Basis
- Private Practice
- Advisory Function
- Tradition of Service
- Representative Institute
- Code of Conduct
Explain F.A.R Bennion’s concept of professional practice AND why it’s important in the definition of professionalism.
PROFESSIONAL PRACTICE:
Daily person-to-person interaction with individual clients and the requirement of acting only in their best interests engenders professional expertise and standards not necessarily derived from acting in the larger interests of a public or corporate employer as a salaried employee.
The interests of this client must be served in preference to the interests of third parties (subject to certain legal and ethical limitations) and in preference to the private interests of the licensee/agent.
Define & explain PROFESSIONAL ETHICS?
Professional ethics are a branch of the science of morals which concerns the daily business conduct of professionals.
Written codes contain guidelines voluntarily adopted by members of profes-sional associations as the minimum standard of behaviour necessary to maintain the reputation of the profession as a whole, in the public opinion.
NOTE ONLY
Statutes, such as the Real Estate Services Act, generally set only the minimum standards of conduct required by the law. The codes of conduct and standards of professional associations build upon this foundation, attempting to impose a standard of conduct for real estate professionals which reach a higher moral level than what is merely legal. This is seen as an essential method of attaining public trust and maintaining a profession’s integrity.
NOTE ONLY
Statutes, such as the Real Estate Services Act, generally set only the minimum standards of conduct required by the law. The codes of conduct and standards of professional associations build upon this foundation, attempting to impose a standard of conduct for real estate professionals which reach a higher moral level than what is merely legal. This is seen as an essential method of attaining public trust and maintaining a profession’s integrity.
TRUE OR FALSE?
A suspension or cancellation of a licensee’s membership in a real estate board or association does not disentitle the licensee to continue his or her professional practice; the licensee may retain his or her licence to practice even though the licensee is subject to discipline for a breach of ethics.
ANSWER: TRUE
While the structure, organization and level of detail in the various codes of conduct differ between real estate organizations, all contain the following important concepts:
[LIST 3]
Codes of Conduct Usually Contain:
- the importance of maintaining professionalism in the given practice of real estate;
- duties not only to one’s clients, but to the public and profession as a whole; and
- ethical and fair dealings with clients, colleagues and third parties.
What Duty is required by Article 18 of the Canadian Real Estate Association [CREA] Standards that states:
The business of a REALTOR® shall be conducted in strict accordance with all statutory and regulatory requirements.
ANSWER: DUTY TO UPHOLD THE LAW
TRUE OR FALSE?
While certain conduct by a REALTOR may have resulted in a charge but an unsuccessful conviction by an appropriate body, a real estate board is still able to discipline that member for a breach of an article of the Standards of Business Practice?
ANSWER: TRUE
TRUE OR FALSE?
Where a REALTOR® has reasonable and probable grounds to believe: (a) that another REALTOR has apparently breached the Code of Ethics and Standards of Business Practice, 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.
ANSWER: TRUE
Explain the Canadian Real Estate Association [CREA] Duty to Uphold Human Rights & Non-Discrimination
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, or sexual orientation, marital status or disability.
Explain the REALTOR’S Duty of Competance?
A REALTOR® shall render a skilled and conscientious service, in conformity with standards of compe-tence 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.
COMPLETE THE SENTENCE:
Professionals generally have what is known as a _ _ _ _ _ _ _ _ _ _ when circumstances indicate the existence of unusual conditions that could be material to the decision of the person relying on the service.
Professionals generally have what is known as a POSITIVE DUTY TO INVESTIGATE when circumstances indicate the existence of unusual conditions that could be material to the decision of the person relying on the service.
Explain the Canadian Real Estate Association’s “Duty to Ascertain All the F**acts”
DUTY TO ASCERTAIN ALL THE FACTS
A REALTOR® shall be informed regarding the essential facts which affect current market conditions.
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.
TRUE OR FALSE?
It is no excuse to point out that a client innocently or intentionally gave incorrect information to you as the professional.
ANSWER: TRUE
If the information is reasonably discoverable by means available to you, such as by a title search or examination of municipal records, and a reasonably prudent professional in your position would have taken steps to obtain the information, then it is negligent not to obtain it.
A failure to personally verify information supplied by a client can, in many cases, result in the real estate professional incurring civil liability to a party who suffers damages as a result of this failure.
TRUE OR FALSE?
In Canada, there appears to be a trend towards integrating a code of conduct into the real estate services legislation itself, rather than relying on the related professional organizations to create them.
ANSWER: TRUE
Explain the non-discrimination standard.
Industry members must not deny professional services to, or be a party to any plan or agreement to discriminate against, any client, customer or party to a trade in real estate or deal in mortgages for reasons of race, creed, colour, gender, sexual orientation, family status, marital status, age, national origin, or physical disability.
COMPLETE THE SENTENCE
The CANADIAN REAL ESTATE ASSOCIATION [CREA] Standards state that “the REALTOR® shall encourage parties to a transaction to seek the advice of _ _ _ _ _ _ _ where such advice is beyond the expertise of the REALTOR®.”
ANSWER: OUTSIDE PROFESSIONALS
Explain the Duty to Advise Fully, Candidly and Honestly
Part of being a competent professional is making certain that both good news and bad news are imparted to a client regardless of the fact that this degree of honesty may, on occasion, result in a loss of business.
A professional real estate consultant must maintain his or her reputation for integrity at all costs.
NOTE ONLY
A professional real estate consultant has an ethical duty to present all options to a client. This duty is implicit in, and a part of, the duty to advise fully, candidly, and honestly. One very practical reason for observing this duty is to avoid giving incomplete advice, which may lead to results that are not in a client’s best interests.
NOTE ONLY
A professional real estate consultant has an ethical duty to present all options to a client. This duty is implicit in, and a part of, the duty to advise fully, candidly, and honestly. One very practical reason for observing this duty is to avoid giving incomplete advice, which may lead to results that are not in a client’s best interests.
TRUE OR FALSE?
The duty of confidentiality continues after the particular transaction is finished. It is, for example, unethical to disclose a client’s true bargaining position to a competitor even after a particular contract with the competitor is negotiated and the deal closed.
ANSWER: TRUE
**Explain the duty to avoid conflicting interests?
Why is it that professionals must avoid conflicts of interest?**
Professional advice must be untainted by any private interest of the practitioner. It is a prime justification of the basic proposition … that advice should ideally be given by an individual who is beholden to no one, free from personal concern or involvement, and subject to no pressures or influences restricting his independence.
The professional bodies have rightly regarded the securing of this state of indepen-dence, both for their members and for themselves, as one of the principal objects of their existence
Explain the Canadian Real Estate Association [CREA] standard & requirements on fee setting?
CREA’s Standards require its members to discuss fees, remuneration, and expenses with the client BEFORE entering into a service agreement:
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.
