The year 2013 marks the centennial of the Code of Ethics and Standards of
Practice of the NATIONAL ASSOCIATION OF REALTORS®. The ;rst Code was written before
license laws and most other regulations governing real estate existed and was
seen as a declaration of the industry’s principles and beliefs. The Code, a living
document that today undergoes annual review and revision, has been called a
“golden thread,” uniting those devoted to raising the standards of professionalism
and service in real estate. Here’s a look back at a few de;ning moments in the life
of one of the industry’s most important documents.
Photo by Benjamin Kende
For a century,
Code of Ethics
has served as a
When NAR was founded in 1908 as the National As-
sociation of Real Estate Exchanges, the organization’s
bylaws included provisions for seven key committees,
one of which was a committee on the Code of Ethics.
So why did it take nearly five years for members of
the committee to put pen to paper and write the first
Code? During the intervening years, members spent
much time—at local board meetings, at annual conven-
tions, and in articles—exploring how the concept of
ethics might apply to real estate in a meaningful way.
Through this process, two of the Code’s most vital and
enduring concepts were developed. In 1910, C. F. Har-
rison of Omaha, Neb., pointed out that a code of eth-
ics “naturally divides itself into two parts, the broker’s
duty to his clients and the broker’s duty to his fellow
brokers.” Today, the code has a third section: duties to
the public. In June 1912, Frank Craven of Philadelphia,
Pa., suggested the Golden Rule as the ideal starting
point. It’s now part of the Code’s preamble in language
that remains endearingly frozen in time: “Whatsoever
ye would that others should do to you, do ye even so to them.”
Code of Ethics preamble on
the wall of a Lansing, Mich.,
real estate o;ce, 1944,
courtesy of the NAR Archives
BALTIMORE CAME FIRST
Heller is manager of
the virtual library and
archives for the N;;;;;;;
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Although NAR’s Code was the first to be applied to
real estate professionals nationally, it was not the first
code of ethics for real estate. The Greater Baltimore
Board of R;;;;;;;®, when it was founded in 1858,
incorporated rules of conduct into its bylaws that discouraged members from stealing one another’s listings.
Those rules are considered to be the industry’s first
formal ethics rules. By 1913, many local associations
had ethics codes. In fact, the 1913 Code was modeled
after rules developed by the Kansas City association.
Since adoption of the Code was voluntary, some boards
created their own versions even after 1913. The national
association amended its bylaws in 1923, requiring all
local associations to adopt the Code.
1913 convention attendees, courtesy of the NAR Archives
YEP, the RULES APPLY to YOU
At first, it was assumed that real estate brokers, once
made aware of the rules, would simply abide by them.
At least in some instances, that proved to be more
hope than reality. So by 1915, the national association
was encouraging local boards to set up enforcement
procedures. NAR’s first ethics enforcement guidelines were issued in 1925. Still, seven decades later,
enforcement was apparently still an issue, because in
1998, NAR President R. Layne Morrill appointed a
presidential advisory group to address the problem.
The group recommended several steps to enhance
enforcement, one of which was for all R;;;;;;;® to
successfully complete Code of Ethics training on a
periodic basis. A four-year cycle of ethics training was
instituted the next year, with the first cycle running
from 2000 to 2004. The current training cycle ends
on Dec. 31, 2012.