The realtor Code of Ethics Quadrennial Member Education Program Copyright, 2000 National Association of realtors

Do you think Jeanie is in violation of the Code? Why or why not?

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Do you think Jeanie is in violation of the Code? Why or why not?
No. This case study is based on Case Interpretation #2-3. See below for further explanation.
What was Jeanie's obligation to the purchaser?
Jeanie accurately conveyed to the buyer information given to her by the seller. There was no reason to believe that hardwood floors were not present as the seller stated. This case makes clear that the REALTOR has a right to rely on the representations of the seller unless there is reason to believe that the seller’s information is not accurate.
You should clearly explain that state law may vary the results of this case in a civil action. It is possible that some state law requires that the REALTOR verify and/or substantiate the information given by the seller. If time permits, you may ask whether the result would be different if Ben had a buyer's agent in the transaction. State law may not allow a buyer's agents to rely on a seller's or seller's agent's information and require that the buyer's agent verify and/or substantiate that information.

Page 11

II. Article 2

A. Avoid exaggeration, misrepresentation and concealment of pertinent facts about the property or the transaction;

B. But there is no obligation to discover latent defects, matters outside scope of license, or matters confidential under agency or non-agency relationships.

Case Study

As she always did when listing a home, Jeanie followed her checklist as she completed the property data sheet on Leslie's home. Noticing the hardwood flooring in the family room, she asked Leslie if there were hardwood floors under the wall-to-wall carpeting in the rest of the house. Leslie told her there were. Jeanie noted that and later specified "hardwood floors" on the property data form.

Imagine her surprise when she later received an irate phone call from Ben, the new owner. There was outrage in Ben's voice: "You said there were hardwood floors in this house. Well, there's no hardwood flooring under the carpeting in the living room and dining room. When we took up the carpeting, we found that the bedrooms have hardwood flooring but under the living and dining room carpet there is nothing but plywood subflooring! We paid for a home with hardwood floors! This isn't right!"

Do you think Jeanie is in violation of the Code? Why or why not?

What was Jeanie's obligation to the purchaser?

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