Ethics

Ethics in California Real Estate Practice ## The Ethical Framework for California Licensees California real estate ethics operate at multiple levels: 1. California Business and Professions Code (BPC) — the statutory foundation; violations can result in DRE license suspension or revocation 2. California DRE Regulations (Title 10, California Code of Regulations) — detailed rules on conduct, trust funds, advertising, and supervision 3. NAR Code of Ethics — the voluntary professional standard for REALTORS (those who are members of NAR); California's standards broadly align with NAR's framework Even licensees who are not NAR members are bound by BPC and DRE regulations. NAR membership adds a layer of professional obligations and a peer enforcement process. The CA DRE exam tests both. --- ## California DRE — Grounds for Discipline The California DRE can suspend or revoke a license for violations including: - Making substantially false or misleading statements in advertising or to clients (BPC 10177(e)) - Fraudulent misrepresentation (active or by omission) - Commingling or converting trust funds (BPC 10176(e)) - Paying or receiving unlicensed compensation (kickbacks to non-licensees) - Obtaining a listing under false promises - Engaging in panic selling, blockbusting, or steering - Discrimination in violation of fair housing laws - Acting for more than one party without knowledge and consent of all parties - Secret profits — profiting from a transaction without the client's knowledge - Failure to supervise (brokers disciplined for salesperson violations) --- ## NAR Code of Ethics Overview The NAR Code of Ethics has 17 articles organized into three groups: Duties to Clients and Customers (Articles 1-9): - Article 1: REALTORS must protect and promote client interests while treating all parties honestly - Article 2:…