All Maryland real estate licensees (real estate agents and brokers) are bound by the Maryland Code of Ethics (COE), which is monitored by the Maryland Real Estate Commission.
(The Maryland Code of Ethics can be found in the Code of Maryland Regulations (COMAR) under Subtitle 11: Real Estate Commission.)
Ethics are the values that are demonstrated when you interact with others, either casually or professionally.
Real estate agents and brokers have many expectations to consider, including how to be ethical in their actions with clients and other professionals in the real estate industry. Real estate transactions can be overwhelming for many people. This is why sellers and buyers rely on their real estate agent or broker to provide assistance, honesty, and professionalism when representing them.
The Maryland Code of Ethics divides ethics into three categories:
- Relations to the public
- Relations to clients
- Relations to other licensees
All Maryland real estate licensees must abide by the Maryland Code of Ethics (COE), enforced by the Maryland Real Estate Commission (MREC).
Title § 17-207 of the Maryland Code empowers the Maryland Real Estate Commission (MREC) to adopt a code of ethics and set the professional standards for Maryland real estate licensees. Title §17–207 states:
(b) The Commission:
(1) at least once every 2 years, shall provide a copy of the code of ethics to each licensee; and
(2) on request of any person, shall make available a copy of the code of ethics to that person.
In terms of the COE’s first category, relations to the public, the first requirement is, “The licensee shall remain informed of matters affecting real estate in the community, the State, and the nation.”
For relations to the client, “The licensee shall protect and promote the interests of the client,” and “In justice to those who place their interests in the licensee’s care, the licensee shall endeavor always to be informed regarding laws, proposed legislation, governmental orders, and other essential information and public policies which affect those interests.”
Among other duties, Article 1 of the Maryland Code of Ethics states that REALTORS®:
- Must promote the interests of their clients, even when acting as principals in a real estate transaction.
- Must not mislead a property owner as to market value to secure a listing.
- Must not mislead buyers or tenants as to savings or other benefits that may be realized by using the REALTOR®’s services.
- Must only represent both sides of a transaction with full disclosure and informed consent of all parties.
- Must submit offers and counter-offers as quickly as possible.
- Must preserve confidential information of their clients’.
- Must, when managing a client’s property, competently manage and protect the property against foreseeable losses.
- Must, when listing a property, disclose the compensation offered to cooperating agents, the fact that the cooperating agents may represent the interests of the buyers/tenants.
- Must advise buyer clients of the REALTOR®’s company policies regarding cooperation, the amount of compensation to be paid by the client, the potential for offsetting compensation from other brokers, the seller, or landlord, any potential to act as a disclose dual agent, and must advise the buyer/tenant that the sellers or sellers’ representatives may not treat the client’s confidential information as confidential.
- When acting as a listing agent, disclose the existence of other offers on the property (with the seller’s approval) including whether the other offers were obtained by the listing licensee, a member of the listing licensee’s firm, or a cooperating broker.
- Must not use, permit, or enable others to use listed or managing property other than by the terms authorized by the property owner.
In addition, a licensee has other requirements to which he or she must adhere, including presenting all written offers or counter-offers to the client in a timely manner, in full, and in hard copy or electronic format.
The passing of legislation relating to real estate practice and the industry as a whole qualifies as “matters affecting real estate,” which is why the Maryland Real Estate Commission requires a legal updates continuing education.
Source: Code of Maryland Regulations (COMAR), Subtitle 11: Real Estate Commission.