Case #16-8: Unauthorized Use of Information Received from Listing Broker for the Purpose of Creating a Referral to a Third Broker or for Creating a Buyer Relationship

REALTOR® A entered a listing with the Association MLS. In the “Remarks” portion of the listing, it was noted that the seller was moving out of state. Shortly thereafter, REALTOR® A received a call from REALTOR® B, requesting permission to show the property to a prospective purchaser. REALTOR® B’s request was granted and the property was shown to the prospect. During the showing, REALTOR® B started a conversation with Seller X regarding his proposed move to another state. REALTOR® B told the seller that he was acquainted with a number of real estate brokers in the city to which Seller X was relocating and suggested that he be allowed to refer Seller X to one of these brokers. Seller X responded that REALTOR® A, the listing broker, had previously mentioned the possibility of a referral and that Seller X felt obligated to be referred by REALTOR® A, if by anyone.

Several days later, Seller X received a phone call from REALTOR® B who again asked permission to refer the seller to a broker in the city to which the seller was moving. The seller indicated that he was not interested in REALTOR® B’s offer and that if he wished to be referred to another broker, he would do so through REALTOR® A. The seller then called REALTOR® A and asked if there was anything REALTOR® A could do to stop REALTOR® B from requesting that he be allowed to refer the seller to another broker. Upon learning of REALTOR® B’s attempts to create a referral, REALTOR® A filed a complaint with the Grievance Committee of the Board alleging a violation of Article 16 of the Code of Ethics and cited Standard of Practice 16-18 in support of the allegations.

In accordance with the Association’s established procedures, the Grievance Committee reviewed the complaint and referred it to a panel of the Professional Standards Committee for hearing. The appropriate notices were sent to all parties and a hearing was scheduled.

How would you decide on REALTOR® B?

Ethics Violation of Article 16 in the NAR Code of Ethics? or No Violation?

See below for how this hearing panel ruled…if you think a violation, how much discipline would you impose? Fine of $________ and ____ hours of education.

If you were the respondent (aka defendant) REALTOR® in this complaint would you have considered taking an offered citation (small fine and education) in lieu of a full formal ethics hearing or waiving your right to a full formal hearing and accepting the fine and education imposed by the ethics committee who takes into account your admission of unprofessional behavior (aka take a plea deal)?

SCR is receiving numerous reports of unprofessional behavior. Across the country, unprofessional behavior is the number #1 complaint by REALTORS® about their colleagues in the market.

There are several ways of addressing and trying to correct unprofessional behavior. Lead by example. If you see unprofessional behavior, say something. Discuss with the other REALTOR®. Discuss with the REALTOR®’s Broker-in-Charge (BIC). Consider filing ethics complaints at the appropriate association and filing license law complaints at LLR.

At the hearing, REALTOR® A produced a written statement from Seller X in support of his testimony and concluded that REALTOR® B had violated Article 16 of the Code of Ethics in attempting to use confidential information received through the Association’s MLS to attempt to create a referral to a third broker.

REALTOR® B responded that he was attempting to promote the seller’s best interest by referring the seller to a reputable broker whom he knew personally in the city to which the seller was going to relocate. REALTOR® B indicated that the seller had not accepted his offer of referral and, based on such refusal, REALTOR® B had not, in fact, made any referral and, therefore, had not acted in a manner inconsistent with his obligations as expressed in Standard of Practice 16-18.

After giving careful consideration to all the evidence, the Hearing Panel determined REALTOR® B to be in violation of Article 16 by his attempt to utilize confidential MLS information to create a referral to a third broker, contrary to the intent of Standard of Practice 16-18, even though his effort to obtain the seller’s permission to do so had been unsuccessful. The Hearing Panel also commented that MLS information is confidential and to be utilized only in connection with the REALTOR®’s role as cooperating broker. The panel further commented that information received from a listing broker through the MLS should not be used to create a referral to a third broker or to create a buyer relationship unless such use is authorized by the listing broker.

Posted by: Byron King on 4/7/21 (This information is only accurate as of 4/7/21. You must contact SCR for updates and changes to this information after 4/7/21 as laws and regulations may change over time. SCR 803-772-5206 or email info at