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The National Association of Realtors (NAR) is considering major revisions to its Code of Ethics and policy statements, citing legal risks and the need for clarity. Meanwhile, a proposed law in Texas could complicate enforcement of its current rules.
An agenda for NAR’s upcoming legislative meetings — which are scheduled for May 31 to June 5 — includes a risk assessment that flags portions of the group’s ethics code and related policies as potential legal liabilities, Inman reported.
In response, NAR is reportedly proposing to more precisely define “harassment” and to limit disciplinary action to violations that occur in a professional or business setting.
The revisions would still encourage members to uphold the code’s values “in all of their activities,” but enforcement would focus on conduct linked to real estate work.
The recommendations are meant to bring clarity and reduce risk for state and local associations, as well as their volunteer leadership, the agenda states.
NAR is also weighing rule changes related to the Sitzer-Burnett commission lawsuit settlement. These include requirements for agents to tell clients that compensation is negotiable, according to Inman.
NAR’s speech code was introduced in 2020. The provisions aimed to stop Realtors from engaging in discriminatory hate speech, even outside of their professional activities.
That rule — found in Article 10 of the Code of Ethics — could soon face legal challenges if Texas S.B. 2713 becomes law.
Introduced by Mayes Middleton (R), the bill explicitly bans any trade association from “denying access, membership, or participation based on various factors, including race, color, religion, sex, disability, familial status, national origin or an individual’s exercise of freedom of speech or assembly.”
The prohibition stands regardless of any conflicting provisions in an association’s or organization’s bylaws. If passed, the bill would take effect on Sept. 1.
NAR President Kevin Sears acknowledged the growing legal uncertainty. He said in a recent memo that “it has become clear that there is ongoing confusion and uncertainty regarding the interpretation and implementation of the rule,” according to Inman.
Sears emphasized that the organization remains committed to fair housing and equal treatment. “We take any changes to the Code of Ethics very seriously,” he said. “The amendment process is thoughtful and rigorous.”
