NAR Speech Policy Change Could Shift Disciplinary Burden To Brokers

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It’s been a week since the National Association of Realtors changed its Realtor Code of Ethics’ Standard of Practice 10-5, which no longer includes the terms “hate speech, epithets, or slurs” and now only applies to “Realtors’ actions in their capacity as real estate professionals.”

Although NAR has defended the changes — with NAR director Matt Difanis saying the adjustments don’t impact “the spirit” of the policy — several affinity group and inclusion leaders say the shift on which activities the policy applies will complicate brokerage leaders’ ability to hold their agents accountable for what they say or do outside of the office.

“I’m just gonna speak openly with you, and this is my own sort of speculation, to a certain degree, that NAR is doing the types of things that many corporations are doing right now,” the National Association of Hispanic Real Estate Professionals (NAHREP) Co-founder and CEO Gary Acosta said.

“They’re looking for ways to reduce potential liability, and I think they’re looking for circumstances where they may be viewed as maybe prioritizing one community over the other too much,” he added. “Whether it’s true or not, I do think that’s what all companies are sort of dealing with right now.”

The NAHREP CEO’s speculation appears to ring true, with NAR Professional Standards Committee Chair Todd Beckstrom saying on the day of the vote that the policy changes not only “provide much needed clarity to members,” but also “reduce risk to state and local associations and their volunteer leadership who administer and enforce Article 10.”

A NAR spokesperson echoed Beckstrom’s comment, telling Inman via email that the Association “is committed to upholding principles of fair housing and equal treatment for all Realtor members and consumers.”

“The updates strengthen this commitment by providing more clarity for volunteer leaders who enforce and administer the Code and members so they can better understand and comply with Article 10, and by making the Code of Ethics more sustainable and defensible to legal challenges,” they added. These efforts will ensure the Code of Ethics continues to hold REALTOR® members to a high ethical standard that consumers value now and for generations to come.”

Even if the policy changes mitigate risk for state and local associations, Acosta said there could be an opposite impact for brokerage leaders looking to uphold NAR or their company code of ethics.

“I think what NAR is doing is pushing that responsibility from themselves to the individual employers who are members of their organization,” he said. “It becomes up to the local real estate brokerage and the real estate offices out there to ensure that their employees aren’t engaging in behavior that would expose the company to liability or a negative image in those communities. I think that’s the net result of the policy change.”

“I’m an employer, and if I have an employee who is engaging in hate speech, or, let’s just say, racist behavior online or somewhere else, does that give me the right to terminate that employee if it violates some code of conduct that we have within our company? I think it does,” he added. “Also, as the head of an organization, can I deny someone engaging in that kind of behavior membership in our organization? I think we can.”

Windermere Director of Inclusion and Community Engagement Brooks Glenn said he agrees with Acosta that brokerages will have a bigger responsibility in holding Realtors accountable for violations of 10-5. However, he’s concerned with brokers’ ability to manage ethics complaints and make decisions in their offices regarding discriminatory behavior, now that the policy only applies to Realtors “in their capacity as real estate professionals.”

“That limitation is an issue. It’s an issue because Realtors are public-facing professionals, and our influence extends well beyond contracts and closings,” he said. “I think that [limitation] will create space for harmful behavior that could impact the communities we say we want to serve.”

In light of the policy change, Glenn said brokerages will have to strengthen their code of ethics to address all forms of discrimination and bias, which includes blatant hate speech to more nuanced situations, like microaggressions. Alongside stronger codes of ethics, Glenn also said brokerages will need to invest in diversity, equity, and inclusion training that helps agents and team members understand how to navigate racial, gender, sexual, etc. differences with respect.

“At Windermere, we’ve reaffirmed our commitment to diversity, equity, and inclusion in the space of real estate, we’ve looked at the historical harms, and what’s our role in correcting those harms,” he said. “The term DEI has been politicized, hence why my title is the director of inclusion and community engagement.”

“Community engagement is the heart of all of this — how can we position ourselves to provide access to homeownership for all? Again, this change has the potential to hurt this goal, which honestly, we should all have,” he added. “It makes us focus solely on the result, the transaction, and not the everyday abuse that happens and erodes community trust in us.”

LGBTQ+ Real Estate Alliance President Justin Ziegler said his members are worried about the change, especially given the Alliance’s latest annual report that revealed a concerning rise in anti-LGBTQ+ sentiments among agents.

“I can’t speak for everyone, but I can tell that a lot of our members feel that this is going to ultimately water down the code of ethics,” he said. “I have heard absolutely nothing that [the change] would, anyway, impede people from continuing to file a complaint. But we do worry that it will reduce Realtor organizations’ ability to ultimately rule on these types of complaints.”

Ziegler echoed Glenn’s concerns about the attempted separation between a Realtor’s actions inside and outside of a transaction or real estate activity, saying that Realtors often leverage their non-real-estate interests to build their businesses. In an attempt to make things more clear-cut, he said, NAR may have made the process of upholding Article 10 more difficult.

“Think about your typical real estate agent, unless they’re a secret agent, they probably have the fact that they are a Realtor all over their Instagram profile, all over the header on their Facebook,” he said. “And so when you think about that, if the Realtor or brokerage header remains constant at the top of the page and they’re spouting really hateful things in their posts, can you say that there is a separation between what they do in business and everyday life? I don’t think so.”

For brokers who are concerned about hiring discriminatory agents, and for agents who are concerned about hitching their license to a discriminatory broker, Ziegler said the best line of defense is having open, honest, and direct conversations about fair housing and the obligation to maintain a non-discriminatory culture.

“When you are interviewing where you’re going to ultimately hold your license, I think that it’s important to ask very hard-hitting questions about what that broker does to represent you, how they’re taking care of you, and how they run their business,”  he said. “Ask them, outright, that if you were discriminated against, would they be willing to file an ethics complaint on your behalf, if you were worried about retaliation. Their answer will let you know if you’re in a safe working environment.”

“On the other side of this, for broker owners, it’s their company, right? They have built a reputation in their community, and it’s critically important to them that every agent represents that broker-owner, the company and the brand well,” he added. “If you’re a broker-owner interviewing agents, you really need to articulate the values of that company and the repercussions if you don’t uphold those values.”

All three leaders said the consequences of the policy change have yet to be seen, and it’s a toss-up on whether NAR’s intended outcome will be what happens. In the meantime, they said brokers and agents should be focused on sharpening their ethical compass and doing the work of clearly defining how an equitable and inclusive industry behaves.

“Discrimination in all forms is still illegal. I think the desire to create a meritocracy in the housing industry and other industries is something everybody shares,” Acosta said. “And I think everybody strives towards creating equality of opportunity for ourselves and the communities we serve.”

“I think this environment — the debates about DEI and NAR’s policy change — will force us to define our goals for equity and inclusion a little bit better,” he added. “And I’m not sure that that’s entirely bad.”

Email Marian McPherson