The following Case Study was produced by the Professional Standards Committee of the National Association of REALTORS®
Revised Case #21-8 May, 1988. Transferred to Article 16 November, 1994.
Realtor® A, a residential broker, worked in a market area that included an attractive suburb of a large city. At the time Realtor® A launched a new advertising program, there were a number of houses for sale in the neighborhood listed exclusively with other Realtors®, each having the respective listing broker’s sign on its front lawn.
Working with his advertising agency, Realtor® A developed a special brochure describing the service of his offices and soliciting clients. The format of the brochure was designed so that it could be hung over a door knob, and a commercial distribution service was employed to hang one of these brochures on homes in Realtor® A’s market area.
In the course of distributing Realtor® A’s brochures, the commercial distribution service placed a brochure on the front door of every house in Realtor® A’s market area, including houses that had other Realtors®’ signs in the front yard. Several of the Realtors® whose clients received Realtor® A’s brochures filed complaints with the Board against Realtor® A. The Grievance Committee considered the complaints and referred them to the Secretary to schedule a hearing by a Hearing Panel of the Professional Standards Committee at which time all of the complaints would be considered. The complaints charged Realtor® A with unethical conduct in failing to respect the exclusive agency of other Realtors®.
At the hearing, Realtor® A defended his action by saying that the distribution of his advertising brochures was widespread in nature; that it had been carried out by a commercial distribution service; and that it was of the same nature as radio or television advertising or a general mailing that might come to the attention of some clients having exclusive listing contracts with other Realtors®.
The Hearing Panel’s decision noted that Realtor® A, in designing his advertising campaign, did not direct his brochures to property owners whose identity had come to Realtor® A’s attention through information disclosed by other Realtors® consistent with their ethical obligation to cooperate with other brokers under Article 3 of the Code of Ethics; e.g., through a “for sale” sign or through information disseminated through a Multiple Listing Service. Rather, Realtor® A’s advertising campaign was directed in an indiscriminate manner to all property owners in a given geographical area. Furthermore, the medium Realtor® A chose for his advertising campaign was a written brochure, which property owners could examine or discard as they saw fit. The panel determined that this form of communication does not harass a property owner, as would telephone calls or direct personal contacts. The Hearing Panel, therefore, held that Realtor® A’s advertising campaign did not violate Article 16 of the Code of Ethics.
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