The Real Deal New York

Should Realtors’ ethics violations be available to the public?

By Kenneth R. Harney | September 14, 2018 11:00AM

In an era when you can find almost anything you want to know online about real estate — the estimated market value of a house, the rankings of neighborhood schools, crime rates, walkability and much more — there’s one important subject that’s difficult for consumers to check out: Ethics infractions by local Realtors, including agents you might want to hire to list your house or help you buy.

You can see tons of agent reviews and ratings on sites like HomeLight and Zillow, but you really have to dig to find out that a particular agent has allegedly:

–Failed to disclose a fuel leak from a nearby facility that endangered the drinking water of houses, including the one the agent sold to unsuspecting clients.

–Misled buyers about the cause of a strange odor in a house listed by the agent, terming it nothing more than “sea air,” when in fact the sickening smells came from a buried septic tank and an oil tank on the property. The house ultimately had to be removed from the site.

–Concealed the fact that the agent representing the seller and the agent representing the buyer shared a massive conflict of interest: They were married to one another.

–Disclosed confidential information about the seller’s dire health condition. “You can offer whatever you want,” the agent representing the seller allegedly told the buyers. “She’ll take it.”

These are actual instances of violations of the Code of Ethics of the National Association of Realtors (NAR), a detailed set of rules which the 1.35 million members are required to follow. Realty agents who are not members are under no such restrictions. The total number of ethics complaints and cases in a given year tends to be small. NAR does not track complaint statistics, but Jill Landsman, spokeswoman for the Northern Virginia Association of Realtors, said that so far in 2018, there have only been 96 ethics-related cases filed with her association, out of a total 12,881 members.

Earlier this year, the NAR’s board of directors adopted a policy change allowing local associations of Realtors to publish the names of members who have two ethics violations within a three-year period, along with details of the infractions. The policy, which is voluntary for local associations, won’t take effect nationally until next January. The head of the committee that recommended the policy to the board said in a statement quoted in Realtor magazine that, “This is what people have been wanting for so long. Right now, we don’t know who the violators are because it’s not published.”

But there’s something missing in this effort at greater transparency. The list of violators will only be permitted in publications that are accessible to local members of the participating associations. Home buyers and sellers will not be able to check whether the agents they’re considering hiring are on the infractions list or not.

So why not let us consumers know about violations? Some Realtors have mixed feelings on the matter. Anthony Lamacchia, broker-owner of Lamacchia Realty Inc. in Waltham, Massachusetts, told me, “I’m of two minds” on disclosing to the general public. At first reading, he said, the policy “sounds pretty well stacked in the Realtor’s favor.” On the other hand, Lamacchia said, most ethics cases involve “agent-to-agent” conflicts “that don’t affect the consumer,” such as complaints filed by one agent about the business practices of a competitor.

Dana Hollish Hill, a Realtor in Washington D.C. and an instructor on ethics, says she would not object to wider dissemination of ethics violations “as long as all the information is presented in context.” It should show degrees of severity — if someone got slapped on the wrist for a minor mistake, it should be clearly distinguished from more serious violations that have the potential to affect clients.

Elizabeth Weintraub, a Realtor in Sacramento, California, says “ethics violations are either serious or they’re a joke, and that’s the problem with the ethics complaint program. You don’t know which. The public viewing of dirty laundry is never gonna happen.”

Absent disclosure of ethics infractions by local Realtor associations, where can you go for information? One possibility is your state real estate commission, which may allow you to search for violations if you look up the agent’s realty license number. Or you can search for reviews — or take note of the lack thereof — on Realtor.com.