When Things Don’t Go Right
IREM ethics boards ensure the Codes are upheld
2018 IREM Ethics Enforcement Summary
By the Numbers
Complaints Received > 11 Complainants > 1 CPM Member 10 outside parties Respondents > 5 CPM Members 6 AMO Firms Ethics Hearings > 6 with Hearing and Discipline Board > 1 Appeal thru IREM Japan (from a 2017 hearing) 2018 Alleged Violations of the AMO Code of Professional Ethics A.2. Contractual Duties > 4 A. 4. Reporting > 4 A.5. Fiduciary > 2 A.9. Laws/Regulations > 2 A.3. Accounting > 1 A.10. Equal Opportunity > 1 A.6. Other Organizations > 1 A.1. Services to Client > 1 2018 Alleged Violations of the IREM Code of Professional Ethics A10. Laws/Regulations > 4 A1. Loyalty to Client/Employer > 3 A7. Conflict of Interest > 2 A.12. Duty to Tenants > 2 A8. Managing Client Assets > 2 A3. Accounting/Reporting > 1 A6. Contracts > 1 A11. Equal Opportunity > 1 A9. Former Client/Employer > 1 Pledge > 1
As any member would attest to, maintaining ethical standards is something IREM takes extremely seriously. After all, the association was founded as a way to put forth ethical principles for financial transactions in real estate, and since then, its history has been deeply rooted in promoting integrity when conducting business. Each member, be it an individual or a firm, is expected to uphold codes of ethics that are the foundations of, simply put, good business.
But misunderstandings happen, as do actions with unintentional consequences—and, unfortunately, outright transgressions occur, too. What then? How is it decided that a violation has taken place and what kind of penalty should be applied?
In 2018, 11 complaints, several citing multiple alleged violations, were submitted to IREM for review. Unlike many other associations, IREM not only has codes of ethics but also enforces them, and therefore has a formal process that is used to bring resolution to such complaints.
Enforcing Ethical Obligations
Anyone can file an ethics complaint against an IREM Member, and IREM Members have a duty to report situations when they believe violations of IREM’s two codes of professional ethics have occurred. When a complaint is received, the Ethics Inquiry Board receives it first and determines if the complaint is valid and actionable and should be forwarded for an ethics hearing, or if it should be dismissed. The board may also request additional information before making its decision.
|“The complaint has to have merit—meaning it shows an accurate understanding of the ethical obligations of IREM Members. ”|
—Ben Forsyth, CPM
When asked what helps the Ethics Inquiry Board review new complaints, the 2019 Chair Ben Forsyth, CPM, said, “The complaint has to have merit—meaning it shows an accurate understanding of the ethical obligations of IREM Members and evidence that the complaint is warranted. The burden of proof is on the complainant who files the complaint.”
Ethics hearings are conducted by the Ethics Hearing and Discipline Board, which reviews all submitted documentation, then hears and questions both parties before determining if a violation occurred and subsequently what the appropriate discipline should be if there was a violation.
“Before voting by secret ballot on whether or not there is a violation, each board member has the opportunity to express their thoughts on the case, based on all information presented. This is an important step,” said Tim Kramer, CPM, ARM, Chair of the 2019 Hearing and Discipline Board. “The board represents the experience diversity within IREM’s membership, and the different experiences and backgrounds ensure the final decision upholds the articles of the codes cited in the complaint.”
|“The board represents the experience diversity within IREM’s membership”|
—Tim Kramer, CPM, ARM
An appeal hearing can be held if the party that was adversely affected by the Hearing and Discipline Board’s decision alleges a procedural deficiency or a misinterpretation of ethical duties. The Appeal Board upholds or modifies the original decision, or can also send the complaint back to the Hearing and Discipline Board for a new hearing. The determination of the Appeal Board is binding.
The Articles that were alleged to be violated in 2018’s ethics complaints are inherent to real estate management. Members are urged to take this opportunity to renew their commitment to their ethical obligations and review the IREM Code of Professional Ethics, the AMO Code of Professional Ethics and the IREM report, Real Life Ethics. ￼
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