Radio, television, and print media all promote the advertisers claims of both improving the environment and at the same time the saving of money in the process. Unfortunately, it is often found that such claims have been more of a marketing ploy rather than an actual benefit. Such forms of advertising have taken on the term "Greenwashing". The term was coined by environmentalist Jay Westerveld of New York. He noted the cards in hotel rooms promoting the reuse of towels in order "to save the environment." Upon further inquiry and investigation he concluded that the actual savings were tied to increase profits of the hotel owners rather than serious attempts to improve the environment. Therefore, he coined the term "Greenwashing" as a modification of "white washing," which is normally associated with attempting to gloss over or cover up the truth. TerraChoice Environmental Marketing Inc. has itemized what they call the "Seven Sins of Greenwashing". Theses "Sins" explain the various approaches and fallacies many advertisers are utilizing in their attempt to convenience consumers to buy their products. Theses Seven Sins can be reviewed at www.sinsofgreenwashing.org or www.terrachoice.com. Such advertising has invaded all forms of product offerings from laundry detergent to residential building components.

Within the housing industry, consumer concerns continue to mount relating to the present and future projected cost of utilities. The strong dependence on fossil fuels, world depletion projections and increased consumer demands all drive the search for lower demand and alternate energy sources. While much of the research, development and promotion is already, and will continue to be, fueled by both the government as well as the private sector, changes are certain to continue.The real estate professional needs, at a minimum, to become aware of the energy saving features both available for new construction as well as renovation. The energy sensitive buyer well understands that long term energy savings means lower utility bills. The terms and acronyms such as SEER ratings, Low-E windows, Energy Star, HER and LEED will likely become the language of the real estate professional as much as the finance references to HUD, FHA or ARM. As with most broad-based changes of this magnitude, several variations or exclusions may exist within a given product. By example, the minimum SEER ratings for air conditioners apply to central units, however window units are not currently regulated. It currently appears the United States is fast moving toward the mandated energy rating of new homes based upon energy efficiency.  Much like energy star ratings and disclosures for the comparing of appliances, residential house energy ratings will provide the buying consumer the ability to compare the structures overall projected energy demands. Such energy efficiency disclosure laws are already in place and strongly enforced in certain other countries. Their laws, and the results of the implementation, may very well be serving as the model, which is currently being debated for creation of such within the United States.The National Association of REALTORS®, and others associated with the building trades, are continuing to monitor and work with Congress on such proposals or bills.

Both present and future changes will continue to place agents, appraisers, home inspectors and others working in the real estate field to stay knowledgeable to these changes and their impact on the properties they represent. It is now reported that the median age for houses in the United States is 30 years. Such older housing often does not have sufficient R-Rated insulation, has single pane windows, and is dependent upon both high energy consuming appliances as well as heating and air-conditioning components. Major upgrades of these properties may be required to maximize their sale potential and to keep abreast of the new required construction features forthcoming for the building industry.

From the forthcoming banning of incandescent light bulbs to the installing of waterless urinals, or the planting of shrubs or plants on the roof tops, the real estate and building industry is changing. It appears we will see more changes in the next few months than we have experienced in the past several years. The real estate professional tries to stay ahead of the curve. Change is not just coming. Much of it is already in place.

All residential building components which demand fossil fuels as a source for their energy will continue to be suspect for regulation and improved efficiency.

(This writing is the opinion of the author. Nothing herein constitutes legal advice. Anyone seeking legal advice is advised to seek out a competent attorney).

Laws in general are established for public protection. Laws, however, sometimes fail in their attempt to address what may be deemed as either ethical or nonethical actions. With the ongoing reports of ethical breeches in American industries and professional occupations, there seems to be a resurgence of public demand for, not only legal, but also ethical treatment in both business as well as ones’ own personal activities. Business ethics should be recognized as a social responsibility with the understanding that there is "never a right way to do a wrong thing." Law, in and of itself, often fails in the demands to treat others in the professional dignified way one would wish for themselves. General laws, however, become the foundation for lawful acts in the attempt to meet society’s requirement for protection against those who would otherwise be abusive toward the innocent. Some laws are designed to address the needs which are specific to a given vocation or profession.

The real estate industry is regulated by a number of such laws. Real estate laws may have been developed as a result of the common practice of citizens over a prolonged period or it may have been ultimately determined in a legal manner by a court of law.

Additionally, governing bodies, by virtue of their position, may pass laws by passing certain statutes. These governing bodies in turn, often appoint administrative agencies to act on their behalf. Such administrative agencies are normally empowered to make additional rules and regulations to help clarify the law and facilitate its enforcement. While Arkansas real estate licensees are subject to all applicable real estate laws, and those affecting public representation, they are normally more directly involved with the administrative agency, known as the Arkansas Real Estate Commission.

The Arkansas Real Estate Commission building is located at 612 South Summit Street, Little Rock, Arkansas. Additional information regarding the Arkansas Real Estate Commission and the laws, rules and regulations affecting Arkansas licensees can be viewed at: www.state.ar.us/arec/. The commission is charged with assuring that certain minimum standards are met before an individual can be licensed to represent the public in Arkansas real estate matters. Such minimum standards are listed on the web site of Camp Real Estate School by returning to our Home Page.  Once licensed, the licensee can then be held accountable by the commission for violations of license law or approved rules and regulations.

Considering these various forms of law, it is understood that in general, "Law sets minimum standards that society will accept." Ethics, however, raises the bar to a higher standard of practice. The real estate industry has access to one of the oldest formed professional "Code of Ethics" existing in the United States. This code was developed by the National Association of REALTORS®. The "Code" was formed in 1913 and has continued to undergo amendments as needed in order to keep pace with changing needs for ethical public service and representations. Being referred to as a REALTOR® is limited to those who have voluntarily become members of the trade association. The REALTOR® Association is not a state agency, and therefore the Association’s purpose within the code is to support, not interpret the law. Likewise, in the absence of holding a law degree, a licensee is restricted from offering legal opinions or giving legal advice. However, Arkansas license law has often been influenced in their development by observing the REALTORS® pre-existing code of ethics and how it further aided public protection. Being integrated into law, it would now mandate compliance for all licensees, regardless of whether or not they are REALTOR® members.

It should be understood, however, that neither REALTOR® nor Non-REALTOR® membership is the determining factor as to ones’ ethics. By virtue of membership, REALTOR® members are held accountable to the Code of Ethics of the National Association of REALTORS® and can be brought into peer judgement and be disciplined for violations. Both REALTORS® and Non-REALTORS® are always subject to the law, but both should further voluntarily strive (with or without a written code), to be ethical in all of their dealings.

"The time is always right to do what is right."

Dr. Martin Luther King

Within any firm, the managing Broker is often the one that sets company policy, approves contracts for presentation, provides internal education and provides general guidance to those licensed with the firm. Therefore, they are normally considered to be the "Mentor" of how things should be done by agents representing the firm. As a result, a constant and consistent message and example should be demonstrated by those in leadership, as to proper ethics and practice.

"If ethics are poor at the top that behavior is

copied down through the organization."

Robert Noyce, inventor of the silicon chip

Someone has said ethics is what you are when you think no one is watching. Others equate ethics with the principles of the "Golden Rule." While one can be required to comply with the law, one cannot make another exceed the law’s requirement and be ethical. However, no one can keep a person from being such. Those who strive for consistent ethical behavior gain the respect of the community they serve and are on the path toward success in both their personal and professional lives. Again, restated, there is "never a right way to do a wrong thing."

REALTORS®, Non-REALTORS® and the public should strive to hold each other accountable to ethical behavior. Likewise, the public needs to demonstrate the same level of ethics toward those they entrust with their business.

Since the National Association of REALTORS® "Code of Ethics" is the only written code for the real estate industry, it is worthy of highlighting the basic intent of its 17 Articles. The code is categorized under three basic headings, Duties to Clients and Customers, Duties to the Public and Duties to REALTORS®. The full code can be further referenced at: www.realtor.org/mempolweb.nsf/pages/Code?OpenDocument.

 Duties to Clients and Customers

Article 1

REALTORS® protect and promote their clients’ interests while treating all parties honestly.

Article 2

REALTORS® refrain from exaggeration, misrepresentation or concealment of pertinent facts related to property or transactions.

Article 3

REALTORS® cooperate with other real estate professionals to advance their clients’ best interest.

Article 4

When buying or selling on their own account or for their families or firms, REALTORS® make their true position or interest known.

Article 5

REALTORS® do not provide professional services where they have any present or contemplated interest in property without disclosing that interest to all affected parties.

Article 6

REALTORS® disclose any fee or financial benefit they may receive from recommending related real estate products or services.

Article 7

REALTORS® receive compensation from only one party, except where they make full disclosure and receive informed consent from their client.

Article 8

REALTORS® keep entrusted funds of clients and customers in a separate escrow account.

Article 9

REALTORS® make sure that contract details are spelled out in writing and that parties receive copies.

 Duties to the Public

Article 10

REALTORS® give equal professional service to all clients and customers irrespective of race, color, religion, sex, handicap, familial status or national origin.

Article 11

REALTORS® are knowledgeable and competent in the fields of practice in which they engage or they get assistance from a knowledgeable professional, or disclose any lack of expertise to their client.

Article 12

REALTORS® paint a true picture in their advertising and in other public representations.

Article 13

REALTORS® do not engage in the unauthorized practice of law.

Article 14

REALTORS® willingly participate in ethics investigations and enforcement actions. 

Duties to REALTORS®

Article 15

REALTORS® make only truthful, objective comments about other real estate professionals.

Article 16

REALTORS® respect the exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with their clients.

Article 17

REALTORS® arbitrate financial disagreements with other REALTORS® and with their clients.

In an effort to continue reinforcing the practice of ethics by REALTOR® members, all REALTORS® are required to take an approved ethics course at least once every four years. However, many local Boards of REALTORS® have ongoing ethics training for new licensees and refresher courses for current membership. A full copy of the REALTOR® Code of Ethics and Standards of Practice can be found at: www.realtor.org/mempolweb.nsf/pages/Code?OpenDocument.

Whether one is a REALTOR® or Non-REALTOR® licensee, has no bearing on the importance of one dealing in an ethical manner with all parties at all times. Loyalty to the client is paramount but dealing honestly with all parties is imperative. Such statements are consistent with both law and ethics for anyone seeking to deal professionally with another.

With over one million members nationwide, the term REALTOR® is a registered trademark of the National Association of REALTORS®. We are all challenged to be leaders in ethical behavior both in our personal as well as our professional lives. Ethical behavior is found in individuals possessing great strength of character, determination for doing right, and seeking the betterment not only for themselves but all others. They become great role models and make great leaders.

"I am more afraid of an army of 100 sheep led

by a lion than an army of 100 lions led by a sheep."

– Talleyrand, (1754-1838)

Law allows for many forms of business structures. Therefore, many real estate companies may vary in the level of services they provide for the fees they receive. To be successful, a real estate firm may often assess the market and may change in their business philosophy or marketing techniques in order to meet the needs of their customers or clients. However, to be professional and maintain the respect of both their peers and the public, they must always temper all their decisions and actions based on ethical consistency.

"In matters of style, swim with the current.

In matters of principle, stand like a rock."

–Thomas Jefferson, 3^rd President (1743-1826)

Camp Real Estate School has long been a provider of Ethics courses as required by the National Association of REALTORS®. Such courses can be offered as a classroom attendance course or obtained through Distance Education. Either way, the course will meet the annual continuing education requirements of the Arkansas Real Estate Commission, the State Board of Private Career Education and the Oklahoma Real Estate Commission. Such course offerings are available at different times and locations throughout the state. Sponsorships for courses can be arranged with REALTOR® Boards or Brokers wishing to offer in-house continuing education courses.

For further information, contact your local Board of REALTORS® or Camp Real Estate School – "Where education is a passion not a pastime."

(This writing is the opinion of the author.  Nothing herein constitutes legal advice.  Anyone seeking legal advice is advised to seek out a competent attorney).

Fence Line Disputes and Encroachments

Both real estate agents and buyers may mistakenly assume that an existing fence is the property line. There may have been no disputes over it being the accepted line by former owners. They may have even cooperated together in the actual building of the fence, thereby referring to it as a party fence. However, at a later date with both a survey performed and now under different ownership a conflict may arise.

Historically, in the past it was not uncommon for boundary fences between rural land ownership to be fenced without a formal survey. The owners often did their own form of surveying or came to an agreement as to corners and fence placements. Rural fencing often reflected the construction to be one of convenience rather than exactness. Along with the using of posts, wire was often nailed to existing trees that were thought to be close to the line. However, over time, with increased land values and a more litigious society, neighbor conflicts and potential legal actions are more prevalent.

An existing fence line discrepancy or any encroachment (a trespass of improvements) can only be determined by a survey.

A real estate agent must exercise care when asked if the “fence is the line” or “are those the survey corners” to the lot. While visual evidence may appear strong it may be wrong! While rare, it is sometimes found that corners have been moved or evidence has been altered. An agent does well to inform the party that “I am not a surveyor, and a survey is the only means of verifying the answer to your question.” While an agent may have an “opinion”, if stated it must be understood as such and is not to be perceived as a statement of fact. To again clarify that only a survey would verify it to be factually correct is of utmost importance.

Occasionally, a certain loan program offered by a lending institution may not require a survey for lending purposes. A real estate agent should be careful to not suggest or support a buyers thinking that since the loan company does not require such, it is not important for them to have one performed. The lender may feel, even without a survey their collateral would be protected in the event of foreclosure. A fence off line a little, or perhaps a storage building encroaching either way would not significantly effect their financial position. However, this may affect the new buyer in the future when they elect to sell. As a future seller, if the then prospective buyer requires a survey and it reflects encroachments, guess who gets to pay for curing the problems. If, however at the time of the original purchase, a survey was provided and encroachments were found to exist, then normally the seller would have been required to provide the needed corrections. Because of such, an agent would do well to inform a prospective buyer that while a given loan program does not require a survey, the buyer may still want to affirm by survey the preciseness of property lines or corners. Both the providing of a survey and who shall pay the cost thereof is negotiable at the time of offering to purchase. When the agreement requires the seller to pay for the surveying cost, it may be wise to place a maximum cost to be incurred. Cost may vary considerably based on the expectations of the buyer. The buyer needs to verify if their expectations would require a survey of the boundary lines only or also a location of improvements within the boundaries. Seeking bids from more than one surveyor may well reflect a sizable difference for services performed. Often this is a result of one surveyor having previously done work in close proximity to the subject property being able to rely on prior field notes for a point of beginning. Whereas another surveyor, reflecting a much higher bid, may have an extensive amount of work required to establish a point of beginning due to lack of prior activity near the subject property. This extra work translates into additional costs. However, the surveyor with the higher bid may prove to be the lower bidder on the next property for the same reasons.

If a discrepancy results in a unresolved dispute between boundary owners regarding encroachments of such things as fence locations or other improvements, a court of law may have to make final determination based on a Quiet Title Action.

Real Estate Agents must not give legal advice.

 

 

(This writing is the opinion of the author. Nothing herein constitutes legal advice. Anyone seeking legal advice is advised to seek out a competent attorney).