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Code of Ethics Case Studies

Case #6-2: Manager's Use of Client's Property for Vending Machines

REALTOR® A managed Client B's large apartment building, and made an arrangement under which coin-operated vending machines were placed in the basement of the building.

Six months after the machines were installed, Client B noticed them and raised a question as to the propriety of REALTOR® A's action in installing them, and deriving revenue from them, without Client B's knowledge and consent. REALTOR® A's response was that he had considered the machines a service to the tenants which in no way affected Client B's interests. He told Client B that he did derive a small amount of revenue from them, which had not been remitted to Client B because he felt that this revenue compensated him for his time and effort in arranging for installation of the machines and maintaining contact with the firm that operated them. He suggested that if Client B was unhappy he could seek a formal ruling by submitting the matter to the Professional Standards Committee of the Board of REALTORS®.

Accordingly, Client B did just that. At a hearing on the matter it was established that REALTOR® A had not consulted his client at the time he authorized installation of the machines; that revenue derived from operation of the machines had been retained by REALTOR® A; and that Client B had been furnished no information whatsoever in the matter until he observed the machines in his own periodic inspection of the building.

Based on your understanding of the Code of Ethics Article 6, what do you think the hearing panel concluded? Show Answer