If you can’t say anything nice…

At the NAR Midyear Meetings, the Professional Standards Committee and Board of Directors approved changes to the Standards of Practice accompanying Article 15 of the Code of Ethics. Article 15 prohibits REALTORS® from knowingly or recklessly making false or misleading statements about a competitor or the competitor’s business practices.

At the meeting, the existing Standard of Practice 15-2 was updated to make it clear that this duty applies not only to statements made by a REALTOR®, but also to statements that might be passed on by that REALTOR® in some way. Specifically, it now explicitly prohibits publishing, repeating, retransmitting or republishing false or misleading statements made by others. In full, the new SoP (which takes effect in January 2010 unless there are additional changes) now reads:

“The obligation to refrain from making false or misleading statements about competitors, competitors’ businesses and competitors’ business practices includes the duty to not knowingly or recklessly publish, repeat, retransmit, or republish false or misleading statements made by others. This duty applies whether false or misleading statements are repeated in person, in writing, by technological means (e.g., the Internet), or by any other means. ”

A new Standard of Practice (presumably to be numbered 15-3) was also added:

“The obligation to refrain from making false or misleading statements about competitors, competitors’ businesses and competitors’ business practices includes the duty to publish a clarification about or to remove statements made by others on electronic media the REALTOR® controls once the REALTOR® knows the statement is false or misleading.”

The primary intent here seems to be to create an affirmative responsibility for REALTORS® to react to any complaints about statements that may be made by others in an electronic forum (such as a blog) controlled by that REALTOR®. For example, assume that REALTOR® A publishes a blog, and a consumer puts up a statement saying “REALTOR® X stole my deposit money.” Under the new SoP, even though REALTOR® A didn’t make the comment himself, he has a responsibility to clarify or remove the comment at such time as he “knows” that it is false or misleading.

There is already concern in the blogosphere as to the effect of these changes. One argument is that by making REALTORS® more responsible for editing the content of comments on their blogs and Web sites, they may take on additional legal liability as “publishers” rather than simply “providers” of electronic data. There also are questions as to when it can be said a REALTOR® “knows” that a bit of information is false and/or misleading. For example, does REALTOR® A have to be told about the comment before knowledge is imputed, or could someone suggest to a hearing panel that the comment was so outrageous that REALTOR® A should have “known” it was false the moment he read it? And what if there is a comment of questionable truth? Does REALTOR® A have to remove the statement when he’s not sure if it is or isn’t actually true?

In short, there are a lot of unanswered questions. But there always are when there’s a change to the Code that affects current business practice – especially when those practices themselves are continuing to emerge. Remember that these changes don’t take effect until January 2010, so there may be additional changes in November if there is reason to make them.