Dear Shannon:  I’ve been a land broker for a long time, built a reputation for having the highest level of ethics in business and wanted to share that I learned something new about the Code of Ethics: Article 13 has two obligations, and for all these years I was only focused on one.

I listed 23+ acres of land for a seller, put a sign up on the property and immediately got a call from a potential buyer. The next day the buyer inspected the property and submitted a full price offer. I presented the offer to my seller, and my seller had me prepare a counteroffer asking me to try to negotiate a higher price. The buyer was not happy and said they were going to consult their own attorney to see if they could force my seller to go through with the sale at the price it was originally listed. I told the buyer they were free to consult their own attorney, but, in my opinion, litigation would be expensive and a waste of time because the seller couldn’t be forced to sell. The buyer agreed to the higher price and the deal was closed.

Soon after, the buyer filed an ethics complaint against me claiming I gave them bad advice. At the ethics hearing, the buyer said they intended to consult their own attorney, but because of my assurances that legal action would be a waste of time, they decided not to. I said I told the buyer it was only my opinion, not intended to be a conclusive statement of the law. And, by the way, it was a correct statement under the law that the buyer could not force the sale.

I made sure to tell the buyer it was my opinion and it wasn’t intended to be a conclusive statement of the law. I didn’t think this was the unauthorized practice of law under Article 13 and the hearing panel would confirm my opinion. Interestingly, instead the hearing panel found me in violation of Article 13 for not affirmatively recommending that the buyer consult their own attorney.  That’s the part I had missed under Article 13. There are two different obligations under Article 13, and I had only been focused on one of them. Lesson learned.  My business practices will change for the better now that I’ve been made aware of this additional obligation. I’m grateful for the ethics hearing panel for holding me to the highest ethical standards.  Learned Something New

Learned Something New: Wow, thank you for sharing. It’s refreshing to hear how open you are to learning something new. I’m confident it will encourage other Realtors to be open to the possibility of learning something new and to improving their own business ethics.

Let’s take a look at the section of the Code at the center of this learning opportunity. Article 13 states: “Realtors® shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction requires it.” (emphasis added)

The first obligation is to refrain from engaging in activities that constitute the unauthorized practice of law. When the buyer wanted to consult their own attorney about forcing your seller to sell, you expressed your opinion that it would be expensive and a waste of time, because the buyer wasn’t going to be able to force the sale. The hearing panel determined that simply by pointing out the fact that legal action was likely to be time consuming and expensive was stating a realistic situation that the buyer should consider and that this was proper. The panel further concluded that the expression of an opinion as to the probable outcome of the case was not an “unauthorized practice of law” within the meaning of Article 13. (NOTE: Other laws may apply to the “unauthorized practice of law” and might be interpreted differently, but in this article we are focusing on the “unauthorized practice of law” within the scope of Article 13 as interpreted by Case 13-3.)

Instead of finding you in violation of Article 13 for activity constituting the ‘unauthorized practice of law,’ the panel noted a second obligation under Article 13. Let’s look again at Article 13: “Realtors® shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction requires it.” (emphasis added)

The hearing panel noted the obligation to “recommend that legal counsel be obtained when the interest of any party to the transaction requires it.” The buyer told you they wanted to consult an attorney to find out whether they could compel the seller to convey title to the property. But you expressed your opinion that it would be expensive and a waste of time. Even though those statements may have been true, the panel concluded that because you were aware the interest of the buyer required a legal opinion and failed to affirmatively recommend the buyer consult their attorney to definitively establish the legal rights in question, you had violated Article 13.

An excerpt from The Preamble in the Code of Ethics and Arbitration Manual reads; “The term Realtor® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations.” Sounds like you are committed to the lofty ideal of moral conduct in your business relations. Thank you for sharing your story, embracing the education provided by the ethics hearing process and for inspiring others to have an open mind when it comes to learning something new and to improving their own business ethics.

Inspired by Case #13-3: REALTOR®’s Obligation to Recommend Counsel When Needed.  Other laws and rules apply.

Shannon Allen is an attorney and Florida Realtors® Director of Local Association Services

Note: Advice deemed accurate on date of publication

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