In my State, there are rules in the Occupational code that makes certain practices illegal. Many agents openly violate these rule and the State does not inforce them.

If I decide to just follow the herd and violate these rule too, is it an Ethics violation, even if the State isn't inforcing rules? If so, can anyone tell what part of the Ethics Code is being violated???

Your post is vague enough that it would be hard to tell if your concerns about violating an Occupational Code are applicable or not. I don't think looking for an ethics violation over something that may be illegal is the right approach though.

Since the NAR Code of Ethics only applies to Realtors, and there are many licensed agebnts that are not Realtors, the first question needs to be if what they are doing is legal or not. If it is illegal then it becomes a law enforcement issue, not an ethics problem. If it is legal then you can move to the question of it being ethical.

[quote=Mr. Foreclosure]Your post is vague enough that it would be hard to tell if your concerns about violating an Occupational Code are applicable or not. I don't think looking for an ethics violation over something that may be illegal is the right approach though.

Since the NAR Code of Ethics only applies to Realtors, and there are many licensed agebnts that are not Realtors, the first question needs to be if what they are doing is legal or not. [color:#FF0000]If it is illegal then it becomes a law enforcement issue, not an ethics problem[/color]. If it is legal then you can move to the question of it being ethical. [/quote]

Yes, I realize that the Code of Ethics applies only to realtors, with that said, are you saying, with your comment above, that something can be illegal and not be an ethics violation??

An ethics violation is an ethics violation. Whether your state enforces its occupational codes or not - the NAR code of ethics is still enforceable through the Association.

GreatLakesBroker:

What I am saying is that if you are concerned about a violation of an Occupational Code it is a legal matter not an ethics matter. As a legal matter if it is a law that is violated then some form of prosecution may be the judicial remedy. The ethics issues are not a legal matter but rather an agreement to abide by standards of conduct issued by the organization. The organization may address members failing to abide by those standards through their own rules.

Much of the NAR Code of Ethics is a reflection of legal requirements, though I'm not aware that your state's Occupational Code is one of them. If you are looking at bringing the violators into legal compliance, then the legal system, not the Code of Ethics, is the course to follow.

I know of no where in the NAR Code of Ethics where it passes judgement on the legality of practices that may be regulated by your state's Occupational Code, simply put they are different subjects.

Mr. Foreclosure

Following the herd is not always the best way to go, let your moral values weigh in and you will go in the right direction.
If the codes need to be revamped, seek legislation in that direction.

Blueeyes

Second sentence in our COE:

"While the Code of Ethics establishes obligations that may be higher than those mandated by law, in any instance where the Code of Ethics and the law conflict, the obligations of the law must take precedence."

Here is one code that probably gets violated, but also has penalties:

http://www.ag.state.mi.us/opinion/datafiles/1990s/op10049.htm

That's just one.

My point with the question, was to try and point out to people (especially in Michigan) that if you are doing BPO's for a fee, in almost every case, you're violating the Occupational Code, and by doing so as a Realtor, you are trampling the Code of Ethics.

Technically, I do not think you are allowed to do them legally in PA, either, but the language is kind of murky enough that many get away with it (by saying they're hoping to get a listing out of it...)

I find there are a lot of practices that are in violation of the "rules" or ethics codes. This does not make it right. Just because they are not actively enforced, does not mean that won't someday be enforced.
For example, in my area-- it's not permitted to advertise a rental unit as "no pets" or "adults only"... but I've read soo many ads with this. I've even talked to several agents who had no idea this was not allowed by law and had been advising their clients in this way.
Don't follow the herd-- it could be a costly mistake in the future. I find a lot of those in the industry are simply not aware of what the codes or laws actually say. Educate the ones you can, in a polite and respectful way... and if they continue, that's their problem. They will be the ones to face consequences in the future. Talk to your broker about it if it becomes a problem. They should know the legalities and should enforce them.

If it is wrong it does not matter how many others are already doing it. It is still wrong.

Whether it is wrong according to the law or it is wrong because of the ethical implications does not matter. Wrong is wrong. Do unto others as you would have them do unto you.

I may never be a millionaire but I will never change who I am, forget about how I was raised or sell my soul for money. The choice is yours. Do the right thing or the wrong thing-the difference between right/wrong is not whether you get caught or not. Something is wrong because it is wrong.

As my mother said, and probably everbody else's too: If everybody jumps off a building are you going to do it also? Just because the herd is wrong does not mean you have the right to forget about right/wrong.

Is it really? What if it's ok to do BPO's in 48 of 50 states? (like it probably is)
Or, racial segregation is legal in 48 of 50 states?

Just because something is legal does not make it "right and ethical".

Ya lost me...what's the problem with doing BPO's in MI & PA?

[quote=ManFromTheBand]Ya lost me...what's the problem with doing BPO's in MI & PA? [/quote]

In Michigan, BPO's or other forms of valuation performed by a real estate licensee (Broker or sales person) can only be performed in the persuit of a listing or assisting a buyer. (loose translation) Only a Broker can charge a fee when performing those services.

A sales person performing a BPO, legally or not, can not charge a fee for that service. The Code clearly states that the fee can be charged only when the Broker PERFORMS the service.

When the State Licensing Board cracks down on this, and they will, many agents and Brokers will be in hot water.

It may take a law suit, and from your description it might wind up being a class action of representing a lot of brokers, to determine if such a restriction is enforceable. I see the possibility that it might be considered a "restraint of trade" to forbid charging a fee for a service that the person is qualified to perform.

[quote=Mr. Foreclosure]It may take a law suit, and from your description it might wind up being a class action of representing a lot of brokers, to determine if such a restriction is enforceable. I see the possibility that it might be considered a "restraint of trade" to forbid charging a fee for a service that the person is qualified to perform. [/quote]

In Michigan, as in all other States, through Federal Mandate, the valuation of Real Property is a licensed profession, reserved for the real estate appraisal industry. Our Occupational Code has defined certain instances where Licensed sales people and Brokers may take part, through the course of the lawfull practice of their licensed profession.

I may be qualified to practice law, or perform minor surgery, but how can forebiding me to do these without the proper license be considered a restraint of trade???

Perhaps I'm wrong but I believe brokers are adequately licensed to perform property valuations. I think the only threshhold that an appraiser crosses that is off limits to brokers is when the purpose of the valuation is for a loan product in excess of $250,000. Unfortunately I don't have a ready reference to cite in support of that, just one of the dangers of working from memory.

De Minimus allows local banks (non-fed regulated lenders) to not even require an appraisal for properties valued under $250,000 if the paper is to be held by them. A valuation of their choosing is sufficiant. There is no law or regulation preventing any institution from asking for a BPO in return for a fee, but IN MICHIGAN (and many other states) this service can not be legally performed except for aiding their realty clients and potential clients. That "potential" thing is where the less than ethical sales person and Broker hang their hat.

Your apparent concern over this issue can also be looked at in terms of why the BPO was requested. If it was to establish a value for the lender to buy a property that is in default (the "courthouse steps auction") that would seem to satisfy having the buyer as potential client. On the other hand if it was to eliminate PMI on a current loan then perhaps there is no potential.

With the majority of BPO requests coming through 3rd parties we don't always know the end purpose, I guess that means it is still "potential" until proven otherwise.

The only reason it's that way in Michigan and some other states, is that the Appraiser lobby has more influence than the REALTOR lobby.
I would say there is a major difference in an appraisal vs. a BPO. Look at the logic of the legal counsel of the N. Carolina appraisel board stating: "i.e. an opinion as to a property's probable sale price", which I think is total bs. But who can blame them for trying to protect their turf?

http://www.ncrec.state.nc.us/bulletin/winter97bulletin/broker.htm

Wrong is wrong, whether it is wrong according to the law or wrong according to ethics. We can always try to justify our actions, by saying it is legal, when it may be unethical, but if it is wrong, and as RE professionals and adults, we know what is wrong. If it is illegal or unethical, it is wrong.

If it is legal or considered ethical in another state, but not where you do business you can either accept the way it is where you do business OR move to where the laws/ethics suit you OR work to change the local laws/ethics guidelines where you do business.

If the original poster/question is referring to doing BPOs, and they are illegal in your state, I am sorry this is the way it is. Work to change the unjust laws, and until it is legal and ethical, obey the law/rule. Wrong is wrong, just the same as sometimes laws/rules are unfair/unjust but they are the law/rules we must obey.

For some people it's a predicament to obey unjust laws, for others it isn't, as the OP so accurately observed.

Very true, nothing in life is simple.

Unjust laws are one thing, but I'm talking about civil rights or acts of war here, we're talking about persons CHOOSING to disobey rules and laws laid out in their chosen profession, for the sole purpose of getting a check.

GreatLakesBroker - it seems this issue is bothering you quite a bit - have you inquired with your board about a possible ethics violation? What does your board attorney say?

...because of some politically established rule or law that prevents a licensed agent from making a living?
ie. they just raised the speed limit last week on our I-25 from 55mph to 65mph through the city, because no one was going 55 or less, what does that tell you?

[quote=pikes peak] [quote]we're talking about persons CHOOSING to disobey rules and laws laid out in their chosen profession, for the sole purpose of getting a check. [/quote]

...because of some politically established rule or law that prevents a licensed agent from making a living?
ie. they just raised the speed limit last week on our I-25 from 55mph to 65mph through the city, because no one was going 55 or less, what does that tell you? [/quote]

That the city police should have been fining a lot of people for BREAKING THE LAW!!

The better decision and just option was to raise the speed limit instead of enforcing an arbitrary law, that was to the detriment of the drivers.
Increasing the speed limit made the road safer.

http://www.gazette.com/articles/speed_45926___article.html/mph_limit.html

yes, but when an agent working under a broker's license performs some action or service at the broker's direction, it is the same as the broker performing the service. the agent is an extension of the broker. then, the broker has a right to pay his agent for work done by the agent. so, where's the big violation?

and don't count on the state licensing board getting involved in this on its own. are you aware of the TARP bailout? did you see how quickly our government caters to bankers?

I don't know about the legality of doing BPO but this statement is way off the mark in NC. An agent working under a broker can only do agent activities. An agent is not an extension of the broker.

well, NC may have defined or restricted agent activities under state law. but in general, there is pass-through legal liablility from the agent to the broker to the client.

Correct, the liability flows from the agent to the broker but an agent can not perform broker activities even if they are supervised by a broker.

Sorry, been gone a few days.

State licensing varies. In Michigan there is a distinction between what a Broker can do and what a licensee can do. Not everything that a Broker does, is permisable for a sales person to do. 100% liability for actions runs up hill (Broker is totally responsible for the actions of their sales persons, but the sales persons are limited, by law, of what they can do.

If Michigan wanted licensees to collect a fee for valuation services, they wouldn't have singled out the Broker as able to collect a fee, when they grouped both classes together when stating who can perforn the service.

In New York the payment must go to the broker regardless of who did the work. The broker then pays the agent if the agent actually performed the service.

[quote=Mr. Foreclosure]In New York the payment must go to the broker regardless of who did the work. The broker then pays the agent if the agent actually performed the service. [/quote]

That's the way it is for "Brokerage" services here too. But regardless of that, Licensees in Michigan can not legally be paid for ANY valuation services. Even if the service is legal. (All BPOs are not)

So far I am not aware that the legality of paying for BPOs has been challenged in New York.