Real Estate Code of Ethics: Duties, Complaints, and Sanctions

The Real Estate Code of Ethics is a set of 17 professional rules that every member of the National Association of REALTORS (NAR) agrees to follow as a condition of membership, and it reaches further than any state license law. The rules fall into three groups: duties to clients and customers (Articles 1–9), duties to the public (Articles 10–12), and duties to fellow REALTORS (Articles 13–17).¹ If a REALTOR breaks one of them, anyone who dealt with that agent can file a complaint, and the local association can issue fines, suspend membership, or expel them.

Who the Code Actually Covers

Not every licensed real estate agent is a REALTOR. Any person holding a state real estate license can legally help you buy or sell property, but REALTOR is a trademarked designation that belongs only to NAR members.² This matters for one practical reason: only NAR members are bound by the Code. A non-member agent still has to follow state licensing rules, but faces no obligation to meet the Code’s higher standards on disclosure, cooperation, or advertising.

Membership is voluntary. Once an agent joins, though, the ethical obligations are not. Members must complete at least two hours and thirty minutes of ethics training, and the Code applies to every real estate activity they touch, whether conducted in person, online, or through any other medium.³ A REALTOR who sends you a misleading text about a property is held to the same standard as one who makes the same claim across a kitchen table.

What the Code Requires of Agents Dealing With You

The first nine articles govern the relationship between a REALTOR and the people they work with. These are the rules you interact with most directly as a buyer, seller, landlord, or tenant.

Honesty and Protecting Your Interests

Article 1 is the foundation. When a REALTOR represents you as an agent, they pledge to protect and promote your interests. That obligation comes first, but it does not let them lie to or mislead the other side. Even when serving someone in a non-agency role, honesty is mandatory.¹ A listing agent must push hard for the seller’s price but cannot invent competing offers to pressure a buyer.

Article 1 also governs dual agency. A REALTOR can represent both buyer and seller in the same deal, but only after fully disclosing that arrangement and getting informed consent from both sides. The Standards of Practice add more concrete duties: agents cannot deliberately mislead owners about market value to win a listing, must present all offers promptly, and cannot overstate the savings their services deliver.¹

Disclosure of Property Problems

Article 2 prohibits exaggeration, misrepresentation, and concealment of relevant facts about a property or transaction. If your agent knows the basement floods every spring, they cannot stay quiet about it. The Code does draw a reasonable line, though. REALTORS are not required to hunt down hidden defects that would take a specialist to discover; their disclosure duty covers problems someone with standard real estate expertise would reasonably notice.¹ That boundary is often misunderstood. The rule does not turn your agent into a home inspector. It does mean they cannot look past the water stains on the ceiling.

Written Agreements in Plain Language

Article 9 requires that all agreements related to a real estate transaction be put in writing using clear, understandable language. Listing agreements, purchase contracts, leases, and representation agreements all fall under this rule, and every party must receive a copy after signing.¹ The clarity requirement matters because real estate paperwork is dense. A REALTOR who buries a significant commission term in boilerplate violates the spirit of this article even if the words are technically accurate.

The Standards of Practice also require agents to make reasonable efforts to explain contract terms before a party agrees to them. The rule was amended effective June 5, 2025, to explicitly cover agreements established electronically or through any other means, closing a gap where digital signatures were sometimes collected without adequate explanation.¹

Cooperation With Other Agents

Article 3 requires REALTORS to cooperate with other brokers when doing so serves the client’s interest. Cooperation here means sharing listing information and working together to close deals. It does not require sharing commissions.¹ That distinction became much more important after the 2024 NAR settlement reshaped how buyer agents are paid, discussed below.

Duties to the Public

Fair Housing and Anti-Discrimination

Article 10 prohibits denying equal professional services based on race, color, religion, sex, disability, familial status, national origin, sexual orientation, or gender identity. REALTORS cannot participate in any plan or agreement to discriminate on those grounds, and the rule extends to their hiring practices.¹ The Code’s protected classes exceed those in the federal Fair Housing Act, which does not include sexual orientation or gender identity as explicit protected classes.

The Standards of Practice under Article 10 specifically ban steering and panic selling. In a residential sale, a REALTOR cannot volunteer information about the racial, religious, or ethnic composition of a neighborhood. They also cannot print or display any advertisement suggesting a preference or limitation based on a protected class.¹ Article 10 carries some of the heaviest sanctions in the Code.

Honest Advertising

Article 12 requires REALTORS to present a truthful picture in all advertising and public communications. This covers print, websites, social media, and yard signs. Agents must clearly identify themselves and their firm so consumers know who they are dealing with. Misleading claims about a property’s features, price, or condition violate this article whether the inaccuracy was intentional or careless.

Duties to Other REALTORS

Articles 13–17 largely govern relationships inside the profession, but two of them affect consumers directly. Article 15 bars REALTORS from knowingly or recklessly making false or misleading statements about other professionals or their business practices, including by republishing false claims on their own websites or social media. Article 16 prohibits taking any action inconsistent with the exclusive representation agreements other REALTORS already have with their clients, which means an agent cannot directly solicit a homeowner whose property is exclusively listed with another broker.¹ General marketing is still allowed. A mass mailing to every homeowner in a zip code is fine even if some recipients already have listings; what crosses the line is identifying listed homeowners through MLS data or yard signs and pitching them individually.

How the 2024 Settlement Changed What Buyers and Sellers Experience

In August 2024, NAR implemented practice changes as part of a legal settlement that reshaped how buyer agents are compensated. If you are working with a REALTOR today, these rules affect you directly.

The biggest change: buyer agents who work through an MLS must have a written agreement with their buyer client before touring any home, whether in person or virtually. That agreement must include four specific elements:⁴

The amount or rate the agent will receive, or how it will be determined, stated clearly.
Compensation expressed as a specific number (a flat fee, a percentage, an hourly rate, or zero), not left open-ended.
A cap, so the agent cannot receive compensation from any source that exceeds the amount agreed upon with the buyer.
A conspicuous statement that broker fees and commissions are fully negotiable and not set by law.

Offers of buyer-agent compensation are no longer permitted on MLS platforms. Sellers can still offer compensation outside the MLS, and they can offer buyer concessions like help with closing costs on the MLS.⁴ You do not need a written agreement simply to speak with an agent at an open house or ask about their services. The requirement starts when you begin touring homes together.

These settlement changes drove updates to the Standards of Practice under Article 3, effective June 5, 2025. Cooperating brokers can no longer assume an offer of cooperation includes an offer of compensation. Listing brokers now work with sellers to set the terms of any cooperation offer, and agents are explicitly prohibited from withholding a buyer’s offer while trying to negotiate their own compensation.¹

Filing an Ethics Complaint Against a REALTOR

Anyone who believes a REALTOR has violated the Code can file a complaint. You do not have to be a NAR member or a real estate professional. The complaint goes to the local association of REALTORS where the agent holds membership or participates in an association-operated MLS.⁵

There is a hard deadline. Complaints must be filed within 180 days of the date you knew or reasonably should have known that potentially unethical conduct occurred, or within 180 days after the transaction concluded, whichever comes later.⁶ Miss this window and the complaint will not move forward no matter how strong the evidence is.

The formal complaint goes on Form E-1, available from NAR or your local association. The form asks you to identify the specific Article or Articles you believe were violated, name the REALTOR, and attach a signed, dated statement explaining what happened, when it happened, and when you first learned about it.⁷ Supporting evidence (signed contracts, emails, text messages, photographs) makes a real difference. The more specific and documented your allegations, the more likely the complaint will survive the initial screening.

After filing, the local Grievance Committee first reviews the complaint for procedural fit: was it filed on time, is the respondent actually a member, and if the allegations were taken as true, could they constitute a Code violation.⁸ Complaints that clear this review are referred to a Professional Standards Hearing, where both sides present evidence to a panel.

Sanctions a REALTOR Can Face

If the hearing panel finds a violation, the sanctioning guidelines give it a wide range of options depending on the severity of the conduct and whether the REALTOR has prior violations.

For a first-time minor violation, sanctions are relatively light: a letter of warning, a fine of $500 or less, or mandatory attendance at an education course. A first-time serious violation can bring a letter of reprimand and fines up to $2,000. The most severe first-time violations, particularly those involving discrimination under Article 10, can result in fines up to $10,000, suspension for up to 90 days, or termination of membership for up to three years.⁹

Repeat offenders face steeper consequences. A second serious violation within three years can draw fines up to $10,000 and suspension of up to three months. The harshest repeat-offense sanctions include fines up to $15,000, suspension for up to a year, or expulsion from NAR for up to three years.⁹ Losing NAR membership does not automatically revoke a state license, but it strips the agent of MLS access in most markets, which effectively ends their ability to compete.

1
National Association of REALTORS. 2026 Code of Ethics and Standards of Practice
2
National Association of REALTORS. Who Can Be a REALTOR
3
National Association of REALTORS. Code of Ethics Training
4
National Association of REALTORS. What the NAR Settlement Means for Home Buyers and Sellers
5
National Association of REALTORS. Ethics Complaints, Arbitration Requests, and Related Information
6
National Association of REALTORS. Part 4, Appendix X – Before You File an Ethics Complaint
7
National Association of REALTORS. Form E-1 Ethics Complaint
8
National Association of REALTORS. Part 3, Section 19 – Grievance Committees Review of an Ethics Complaint
9
National Association of REALTORS. Part 4, Appendix VII – Sanctioning Guidelines