Before we begin our discussion on Article 4, find out what happened in Article 3 here.
Article 4 deals with disclosure and family ties. Families are like fudge - mostly sweet with a few nuts. ~Author Unknown
Article 4 states: REALTORS® shall not acauire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner's agent or broker. In selling property they own, or in which they have any interest, REALTORS® shall reveal their ownership or interest in writing to the purchaser or the purchaser's representative.
The only standard of practice underneath Article 4 says that "for the protection of all parties, the disclosures required by Article 4 shall be in writing and provided by REALTORS® prior to the signing of any contract.
For the purposes of the Code of Ethics, the term "Immediate Family" is much broader than your standard (or health insurance) definition.
"As used in the Code of Ethics, the term ‘immediate family’ includes, but is not limited to, the REALTOR® and the REALTOR®’s spouse and their siblings, parents, grandparents, children (by birth or adoption), grandchildren and other descendants."
So this means, if you are representing your brother-in-law, that needs to be disclosed. The language you often see in listings and on contracts is "Agent related to buyer/seller".
If you are representing a company that you also have ownership interests in, that needs to be disclosed. "Agent has ownership interest in buying/selling entity".
It seems so straight forward! So let's examine the following situation:
Buyer X was interested in purchasing a home listed with REALTOR® B but lacked the down payment. REALTOR® B offered to lend Buyer X money for the down payment in return for Buyer X's promissory note secured by a mortgage on the property. The purchase transaction was subsequently completed, though REALTOR® B did not record the promissory note or the mortgage instrument.
Within months, Buyer X returned to REALTOR® B to list the property because Buyer X was unexpectedly being transferred to another state. REALTOR® B listed the property, which was subsequently sold to Purchaser P. The title search conducted by Purchaser P's lender did not disclose the existence of the mortgage held by REALTOR® B since it had not been recorded, nor did REALTOR® B disclose the existence of the mortgage to Purchaser P. The proceeds of the sale enable Buyer X to satisfy the first mortgage on the property, and he and REALTOR® B agreed that he would continue to repay REALTOR® B's loan.
Following the closing, REALTOR® B recorded both the promissory note and the mortgage instrument. When Purchaser P learned of this, he filed an ethics complaint alleging that REALTOR® B had violated Article 4 by selling property in which she had a secured interest without revealing that interest to the purchaser.
... So? What do you think? Did REALTOR® B have an obligation to disclose her financial relationship with the property to Purchaser P?
As always, tell me what you think in the comments!
Susan Hansen
Member Policy
Showing posts with label Ethics. Show all posts
Showing posts with label Ethics. Show all posts
Tuesday, February 23, 2010
Monday, February 8, 2010
The Code of Ethics - Breaking It Down #2
Today, we tackle Article 2. For those of you wondering how the last scenario turned out, you can find the answer in the comments here.
Article 2 states: REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law.
Before we get into interpretation, let's start with a definition. Latent Defects. What are those? Latent defects are hidden flaws, weaknesses, or imperfections that require a thorough inspection to detect.
Knowing that, we move forward to the Standards of Practices (SOPs) to see how we should interpret the article.
SOP 2-1 says that you are only obligated to discover and disclose adverse factors reasonably apparent to someone with expertise in those areas required by their real estate licensing authority. It does not impose the obligation of expertise in other professional or techinical disciplines.
So, if you find that the basement is flooded, we would expect you to reasonably discover that. If there is a leak in the sprinkler system, we would not expect you to find that. If your seller knows about the leak in the sprinkler system, then it is no longer a latent defect (as it is a known defect) and you need to disclose!
This is the article that also addresses the issue of "non-material" factors. Basically, stigmatized property (ie: ghosts, deaths that occurred, etc). The SOP states that anything deemed "non-material" by law or regulation as not being subject to disclosure are considered not "pertinent" for the purposes of Article 2.
Idaho law states: : “No cause of action shall arise against an owner of real property or a representative of the owner for a failure to disclose to the transferee of the real property or a representative of the transferee that the real property was psychologically impacted.”
It goes on to say if “a purchaser who is in the process of making a bona fide offer advises the owner’s representative in writing that knowledge of whether the property may be psychologically impacted is an important factor in the purchaser’s decision to purchase the property, the owner’s representative shall make inquiry of the owner and, with the consent of the owner and subject to and consistent with the applicable laws of privacy, shall report any findings to the purchaser. If the owner refuses disclosure, the owner’s representative shall advise the purchaser or the purchaser’s representative that the information will not be disclosed.”
Basically, the seller does not have to disclose anything about a "psychologically impacted" property if they don't want to. However, if they decide to disclose information, it must be a full disclosure.
So to sum up Article 2, it's all about DISCLOSURE. So let's test your knowledge:
Mrs. A, a retired college professor, came to the office of REALTOR® B, a cooperating broker, in search of a large house in which she could occupy a small apartment, using the remainder of the building to operate a residential club for graduate students. What she had in mind was a deluxe "rooming house" in which the tenants would have use of a parlor, dining room, kitchen, and laundry. She felt confident, from previous experience in the community, that she could obtain from 10 to 16 "roomers", and indicated that she would be guided in her charges to the tenants by the amount of mortgage payments she would have to make.
Most of the large houses on the market were inadequate. Finally, REALTOR® B located a massive old mansion listed with REALTOR® C that appealed to Buyer A. After repeated visits to the house, and after discussing financing with a local lending institution, Buyer A said she was interested in the house if it could accommodate as many as 11 tenants. REALTOR® B accompanied her for another inspection to check on this point.
By planning double occupancy of the large bedrooms, she found she could accommodate eight roomers. In addition, there were three small rooms upstairs that had been used for storage which REALTOR® B suggested might make acceptable single rooms. Buyer A agreed and the sale was made.
Two months later, the buyer filed a complaint with the local Board, charging REALTOR® B with failing to disclose pertinent facts. The complaint alleged that REALTOR® B knew the buyer was taking on a substantial obligation with the expectation of housing 11 persons in the structure; that REALTOR® B had suggested that three rooms might make acceptable single rooms; and that she had been subsequently advised by the building department that these rooms could not be used as dwelling rooms since the windows were too small to meet code requirements. She had been advised that it would cost $1,480 to replace the windows. She charged REALTOR® B with negligence in not advising her of this deficiency. After reviewing the complaint, the Grievance Committee referred it for hearing to before a Hearing Panel of the Professional Standards Committee.
At the hearing, REALTOR® B acknowledged the facts set out in Buyer A's complaint, but advised that the complaint did not state all of the relevant facts. With respect to the house in question, as with many other houses shown to Buyer A, he had made a special check at city hall as to zoning regulations to be sure that the kind of occupancy intended by the buyer would be lawful; that the buyer's specifications were unusual and that in attempting to meet them, he had devoted an unusual amount of time and effort to help her realize her objective; and that he had acted in good faith and had not deliberately failed to disclose any pertinent fact but had, in fact, urged the buyer to consult with an engineer to check with the zoning authorities prior to making an offer to ensure that the property could be utilized as a residential club.
So, what do you think? Did REALTOR® B meet his obligations? Did he do his due diligence? Should he have known that the windows wouldn't meet code? You tell me - in the comments!
Susan Hansen
Member Policy
Article 2 states: REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law.
Before we get into interpretation, let's start with a definition. Latent Defects. What are those? Latent defects are hidden flaws, weaknesses, or imperfections that require a thorough inspection to detect.
Knowing that, we move forward to the Standards of Practices (SOPs) to see how we should interpret the article.
SOP 2-1 says that you are only obligated to discover and disclose adverse factors reasonably apparent to someone with expertise in those areas required by their real estate licensing authority. It does not impose the obligation of expertise in other professional or techinical disciplines.
So, if you find that the basement is flooded, we would expect you to reasonably discover that. If there is a leak in the sprinkler system, we would not expect you to find that. If your seller knows about the leak in the sprinkler system, then it is no longer a latent defect (as it is a known defect) and you need to disclose!
This is the article that also addresses the issue of "non-material" factors. Basically, stigmatized property (ie: ghosts, deaths that occurred, etc). The SOP states that anything deemed "non-material" by law or regulation as not being subject to disclosure are considered not "pertinent" for the purposes of Article 2.
Idaho law states: : “No cause of action shall arise against an owner of real property or a representative of the owner for a failure to disclose to the transferee of the real property or a representative of the transferee that the real property was psychologically impacted.”
It goes on to say if “a purchaser who is in the process of making a bona fide offer advises the owner’s representative in writing that knowledge of whether the property may be psychologically impacted is an important factor in the purchaser’s decision to purchase the property, the owner’s representative shall make inquiry of the owner and, with the consent of the owner and subject to and consistent with the applicable laws of privacy, shall report any findings to the purchaser. If the owner refuses disclosure, the owner’s representative shall advise the purchaser or the purchaser’s representative that the information will not be disclosed.”
Basically, the seller does not have to disclose anything about a "psychologically impacted" property if they don't want to. However, if they decide to disclose information, it must be a full disclosure.
So to sum up Article 2, it's all about DISCLOSURE. So let's test your knowledge:
Mrs. A, a retired college professor, came to the office of REALTOR® B, a cooperating broker, in search of a large house in which she could occupy a small apartment, using the remainder of the building to operate a residential club for graduate students. What she had in mind was a deluxe "rooming house" in which the tenants would have use of a parlor, dining room, kitchen, and laundry. She felt confident, from previous experience in the community, that she could obtain from 10 to 16 "roomers", and indicated that she would be guided in her charges to the tenants by the amount of mortgage payments she would have to make.
Most of the large houses on the market were inadequate. Finally, REALTOR® B located a massive old mansion listed with REALTOR® C that appealed to Buyer A. After repeated visits to the house, and after discussing financing with a local lending institution, Buyer A said she was interested in the house if it could accommodate as many as 11 tenants. REALTOR® B accompanied her for another inspection to check on this point.
By planning double occupancy of the large bedrooms, she found she could accommodate eight roomers. In addition, there were three small rooms upstairs that had been used for storage which REALTOR® B suggested might make acceptable single rooms. Buyer A agreed and the sale was made.
Two months later, the buyer filed a complaint with the local Board, charging REALTOR® B with failing to disclose pertinent facts. The complaint alleged that REALTOR® B knew the buyer was taking on a substantial obligation with the expectation of housing 11 persons in the structure; that REALTOR® B had suggested that three rooms might make acceptable single rooms; and that she had been subsequently advised by the building department that these rooms could not be used as dwelling rooms since the windows were too small to meet code requirements. She had been advised that it would cost $1,480 to replace the windows. She charged REALTOR® B with negligence in not advising her of this deficiency. After reviewing the complaint, the Grievance Committee referred it for hearing to before a Hearing Panel of the Professional Standards Committee.
At the hearing, REALTOR® B acknowledged the facts set out in Buyer A's complaint, but advised that the complaint did not state all of the relevant facts. With respect to the house in question, as with many other houses shown to Buyer A, he had made a special check at city hall as to zoning regulations to be sure that the kind of occupancy intended by the buyer would be lawful; that the buyer's specifications were unusual and that in attempting to meet them, he had devoted an unusual amount of time and effort to help her realize her objective; and that he had acted in good faith and had not deliberately failed to disclose any pertinent fact but had, in fact, urged the buyer to consult with an engineer to check with the zoning authorities prior to making an offer to ensure that the property could be utilized as a residential club.
So, what do you think? Did REALTOR® B meet his obligations? Did he do his due diligence? Should he have known that the windows wouldn't meet code? You tell me - in the comments!
Susan Hansen
Member Policy
Monday, February 1, 2010
The Code of Ethics - Breaking It Down
I had the extreme privilege to teach an ethics class last Friday and one of the students had a great suggestion. To help keep the Code of Ethics at the forefront of your mind, we need to keep posting about it.
I thought I had been, but the message isn't making it out there. I've decided that I am going do a weekly series - One article every week. (For those of you actually familiar with the code, that means 17 weeks of fun!)
Best to begin at the beginning (profound, I know). So here we go - Article 1.
Article 1 states: When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge to protect and promote the best interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly.
So, what does that actually mean? The standards of practice below the article attempt to explain.
- You are obligated to uphold the Code of Ethics
- Code of Ethics applies no matter where and how you are conducting business
- Do not mislead people about the value of a property
- Dual agency is okay so long as all parties involved truly understand what that means and implies
- Present offers objectively and as soon as you can
- You must submit all offers - verbal and written - even after you have an accepted offer. Doesn't mean you have to continue to market the property.
- Keep confidential information to yourself - even after the termination of the relationship - unless you are court ordered to disclose or if your client plans to commit a crime
- Competently manage clients' property and protect it against reasonably foreseeable losses
- Fill your client in about your office policy regarding cooperation and compensation
- Let clients know that the existence, terms or conditions of their offer may not be confidential unless the parties agree otherwise.
- Your fees for doing a valuation cannot be dependent upon the amount of the valuation
- If your seller permits it, you will tell other potential buyers about the existence of other offers. If the buyer's agent asks, you must tell them the source of the other offer (you, your office, other brokerage).
Okay, so those are the basics. Now let's test your knowledge... Let me give you a hypothethical...
Client A, an army officer, was transferred to a new duty station and listed his home for sale with REALTOR® B as the exclusive agent. He moved to his new station with the understanding that REALTOR® B would obtain a buyer as soon as possible. After six weeks, during which no word had come from REALTOR® B, the client made a weekend visit back to his former community to inspect his property. He learned that REALTOR® B had advertised the house: "Vacant - Owner transferred" and found an "open" sign in the yard. Client A found that REALTOR® B never had a representative at the property but continually kept an "open" sign in the yard. Client A discovered that the key was kept in a combination lockbox and when REALTOR® B received calls from potential purchasers about the property, he simply gave callers the address, advised that the key was in the lockbox, gave them the combination, and told them to look through the house by themselves and to call him back if they needed other information or wanted to make an offer.
Client A filed a complaint with the Board of REALTORS® detailing these facts and charging REALTOR® B with failure to protect and promote the a client's interes by leaving Client A's property open to vandalism, and by not making appropriate efforts to obtain a buyer.
REALTOR® B's defense during the hearing was that his advertising of the property was evidence of his efforts to sell it. He stated, without being specific, that leaving keys to vacant listed property in lockboxes and advising callers to inspect property on their own was "common local practice".
So what do you think? Did he violate the Code of Ethics? Weigh in!
Posted by Susan Hansen - ACAR Director of Member Policy
I thought I had been, but the message isn't making it out there. I've decided that I am going do a weekly series - One article every week. (For those of you actually familiar with the code, that means 17 weeks of fun!)
Best to begin at the beginning (profound, I know). So here we go - Article 1.
Article 1 states: When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge to protect and promote the best interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly.
So, what does that actually mean? The standards of practice below the article attempt to explain.
- You are obligated to uphold the Code of Ethics
- Code of Ethics applies no matter where and how you are conducting business
- Do not mislead people about the value of a property
- Dual agency is okay so long as all parties involved truly understand what that means and implies
- Present offers objectively and as soon as you can
- You must submit all offers - verbal and written - even after you have an accepted offer. Doesn't mean you have to continue to market the property.
- Keep confidential information to yourself - even after the termination of the relationship - unless you are court ordered to disclose or if your client plans to commit a crime
- Competently manage clients' property and protect it against reasonably foreseeable losses
- Fill your client in about your office policy regarding cooperation and compensation
- Let clients know that the existence, terms or conditions of their offer may not be confidential unless the parties agree otherwise.
- Your fees for doing a valuation cannot be dependent upon the amount of the valuation
- If your seller permits it, you will tell other potential buyers about the existence of other offers. If the buyer's agent asks, you must tell them the source of the other offer (you, your office, other brokerage).
Okay, so those are the basics. Now let's test your knowledge... Let me give you a hypothethical...
Client A, an army officer, was transferred to a new duty station and listed his home for sale with REALTOR® B as the exclusive agent. He moved to his new station with the understanding that REALTOR® B would obtain a buyer as soon as possible. After six weeks, during which no word had come from REALTOR® B, the client made a weekend visit back to his former community to inspect his property. He learned that REALTOR® B had advertised the house: "Vacant - Owner transferred" and found an "open" sign in the yard. Client A found that REALTOR® B never had a representative at the property but continually kept an "open" sign in the yard. Client A discovered that the key was kept in a combination lockbox and when REALTOR® B received calls from potential purchasers about the property, he simply gave callers the address, advised that the key was in the lockbox, gave them the combination, and told them to look through the house by themselves and to call him back if they needed other information or wanted to make an offer.
Client A filed a complaint with the Board of REALTORS® detailing these facts and charging REALTOR® B with failure to protect and promote the a client's interes by leaving Client A's property open to vandalism, and by not making appropriate efforts to obtain a buyer.
REALTOR® B's defense during the hearing was that his advertising of the property was evidence of his efforts to sell it. He stated, without being specific, that leaving keys to vacant listed property in lockboxes and advising callers to inspect property on their own was "common local practice".
So what do you think? Did he violate the Code of Ethics? Weigh in!
Posted by Susan Hansen - ACAR Director of Member Policy
Tuesday, June 16, 2009
Knowing Your Expertise
Article 11 REALTORS® are knowledgeable and competent in the fields of practice in which they engage or they get assistance from a knowledgeable professional, or disclose any lack of expertise to their client.
REALTORS® are expected to be knowledgeable in the area in which they are practicing. Within the Treasure valley market are several specialty property types: Farms, development land, commercial, industrial and condominium homesites.
These specialities require special education and are not covered by the licensing curriculum or the licensing process for either Salesperson or Broker licenses. A claim may be brought against an agent from a buyer, seller or another agent if their level of competence is below the industry standard of honest and fair dealing. Prior to commencing on listing or selling any of these special property types, an agent should take inventory of which types of special education they have participated in and avoid the areas in which they have no specic or special education without the assistance of a qualified agent with the necessary education.
The National Association of REALTORS® has many different societies and councils to facilitate the education process for these different areas of specialization. All NAR curriculum is approved for continuing education credit in Idaho, however the required hours for license renewal may not be enough to meet the demands of a progressive and complicated industry as is the real estate business.
Many agents may be found having violated the Code of ethics when they have not disclosed to all relevant parties "any lack of expertise", or the ability to prove adequate education demonstating competence. Operate within the bounds of Article 11 and the public will be properly served.
Article summitted by J. Doug Ferguson, ACAR Grievance Committee Member
REALTORS® are expected to be knowledgeable in the area in which they are practicing. Within the Treasure valley market are several specialty property types: Farms, development land, commercial, industrial and condominium homesites.
These specialities require special education and are not covered by the licensing curriculum or the licensing process for either Salesperson or Broker licenses. A claim may be brought against an agent from a buyer, seller or another agent if their level of competence is below the industry standard of honest and fair dealing. Prior to commencing on listing or selling any of these special property types, an agent should take inventory of which types of special education they have participated in and avoid the areas in which they have no specic or special education without the assistance of a qualified agent with the necessary education.
The National Association of REALTORS® has many different societies and councils to facilitate the education process for these different areas of specialization. All NAR curriculum is approved for continuing education credit in Idaho, however the required hours for license renewal may not be enough to meet the demands of a progressive and complicated industry as is the real estate business.
Many agents may be found having violated the Code of ethics when they have not disclosed to all relevant parties "any lack of expertise", or the ability to prove adequate education demonstating competence. Operate within the bounds of Article 11 and the public will be properly served.
Article summitted by J. Doug Ferguson, ACAR Grievance Committee Member
Friday, May 22, 2009
Hypothetically Speaking...
Short Sale Case Study
A new listing is entered into IMLS. The box “Potential Short Sale” is checked. The listing offers 5% to cooperating brokers. The agent remarks include: “Commission to be paid will be half of whatever listing agent receives.”
The REALTOR® Code of Ethics Article 3 requires the Listing Agent (LA) to provide notice to co-op broker of any change in compensation before the Buyer's Agent (BA) presents an offer to purchase.
Consider the following sequence:
Property is listed for $100,000
BA1 submits offer to LA of $95,000. LA presents to third party lien holder; who counters with “will accept, but only with a reduction in total commission paid to 2%.
BA1 withdraws. On the same day that BA1 withdraws offer, BA2 calls listing agent and says “I am bringing you an offer.”
Question – Should LA tell BA2 that the third party lien holder has rejected paying the full commission on a less than full price offer?
Question – What should LA do regarding current offer of compensation?
Question – What if BA1’s offer was full price?
Question – How should LA counsel Seller?
What advice would you give to the Listing Agent?
Tuesday, March 10, 2009
He Said/Did What?!?
The ways to communicate in this world are ever expanding. From Facebook to blogs to Myspace to Twitter... the possibilities seem endless. With more and more ways to connect, there are also more and more ways to accidentally get yourself in trouble.
In the REALTOR® Code of Ethics, there are two articles that seem to come under constant fire-- Article 12 and Article 15.
Article 12 says that REALTORS® will be honest and truthful in all of their advertising, marketing, and communication. This specifically included URLs as expanded by the Standards of Practice incorporated back in 2008. Does this apply to screen names, usernames, handles, and avatars? How far does it have to go before it is no longer a true representation?
Every day, I hear new and unique ways that this line is crossed. A new case interpretation added this year talks about a REALTOR® who specifically registered URLs that were very similar to the names of his competitors... only, the names happened to be "misspelled". When called in front of a hearing panel, he said that it wasn't dishonest because it wasn't the actual name of his competitor. He said by misspelling the name, it became meaningless, and therefore wasn't deceptive... Do you buy that? Yeah, neither did the hearing panel.
That is a pretty blatant instance (I think). What about more subtle issues? What if your avatar is something like "WhiteWaterRealtor". You picked it because you are a white water enthusiast and you sell real estate. If there is also a real estate brokerage named White Water Real Estate, have you taken their name and is a deceptive effect created? You could argue that it is a true picture because you are a white water rafter, but you don't work for that company. Is that a potential article 12 violation? (Weigh in! Tell us what you think in the comments)
Now, the Code of Ethics doesn't specifically mention avatars or usernames, but that doesn't mean they aren't covered in Article 12. The 'spirit' of the article is honest and truthful in all formats...Be able to explain and defend your choices (Hopefully better than the gentleman in the case study).
Article 15 is the other issue at hand. Article 15 says that you will not knowingly or recklessly make false or misleading statements about your competitors. With the many platforms you now have your fingertips, you need to be very careful about what you say and what audience it is reaching--and it may not be the audience you were intending to reach.
On Facebook, depending on the privacy settings you've set, it's possible that the friends of your friends can read what you write. So if you are going to vent or bad mouth, just because you aren't "friends" with that individual doesn't mean it won't come back to them. On Twitter, anything you post is available to read to anyone at any time. For example, I was forwarded a twitter link, and mind you I don't have a twitter account, and I could access every tweet that person had made.
The market is challenging right now--we all know that--and many good people are getting frustrated. While it's a human universal to get mad, vent, or try to take down your competitor, just remember what you say and do, how you say and do it, and where you say and do it can lead down a path that you really didn't mean to take...
Happy Trails!
In the REALTOR® Code of Ethics, there are two articles that seem to come under constant fire-- Article 12 and Article 15.
Article 12 says that REALTORS® will be honest and truthful in all of their advertising, marketing, and communication. This specifically included URLs as expanded by the Standards of Practice incorporated back in 2008. Does this apply to screen names, usernames, handles, and avatars? How far does it have to go before it is no longer a true representation?
Every day, I hear new and unique ways that this line is crossed. A new case interpretation added this year talks about a REALTOR® who specifically registered URLs that were very similar to the names of his competitors... only, the names happened to be "misspelled". When called in front of a hearing panel, he said that it wasn't dishonest because it wasn't the actual name of his competitor. He said by misspelling the name, it became meaningless, and therefore wasn't deceptive... Do you buy that? Yeah, neither did the hearing panel.
That is a pretty blatant instance (I think). What about more subtle issues? What if your avatar is something like "WhiteWaterRealtor". You picked it because you are a white water enthusiast and you sell real estate. If there is also a real estate brokerage named White Water Real Estate, have you taken their name and is a deceptive effect created? You could argue that it is a true picture because you are a white water rafter, but you don't work for that company. Is that a potential article 12 violation? (Weigh in! Tell us what you think in the comments)
Now, the Code of Ethics doesn't specifically mention avatars or usernames, but that doesn't mean they aren't covered in Article 12. The 'spirit' of the article is honest and truthful in all formats...Be able to explain and defend your choices (Hopefully better than the gentleman in the case study).
Article 15 is the other issue at hand. Article 15 says that you will not knowingly or recklessly make false or misleading statements about your competitors. With the many platforms you now have your fingertips, you need to be very careful about what you say and what audience it is reaching--and it may not be the audience you were intending to reach.
On Facebook, depending on the privacy settings you've set, it's possible that the friends of your friends can read what you write. So if you are going to vent or bad mouth, just because you aren't "friends" with that individual doesn't mean it won't come back to them. On Twitter, anything you post is available to read to anyone at any time. For example, I was forwarded a twitter link, and mind you I don't have a twitter account, and I could access every tweet that person had made.
The market is challenging right now--we all know that--and many good people are getting frustrated. While it's a human universal to get mad, vent, or try to take down your competitor, just remember what you say and do, how you say and do it, and where you say and do it can lead down a path that you really didn't mean to take...
Happy Trails!
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