2026 Changes to the Code of Ethics and Arbitration Manual

Dear Shannon: I’m the professional standards administrator for our association. I know the Code of Ethics has been around for over 100 years, the Code of Ethics and Arbitration Manual (Manual) evolves with the profession and, if there are changes, they take effect at the beginning of each year. What are the 2026 changes to the Manual? Thanks for the update. – What’s New

Dear What’s New: You are correct, the Code of Ethics was adopted in 1913 as a commitment to professionalism. And yes, it’s a living document that adapts with the real estate industry. Changes to the Code of Ethics and Arbitration Manual (Manual) generally go into effect on January 1 of each year. Here are a few professional standards changes for 2026. Note: Underlining indicates additions and strikeouts indicate deletions.

1. Amended Article 7 to limit its disclosure and approval requirements to a REALTOR®’s client or clients.

Article 7: In a transaction, REALTORS® shall not accept compensation from more than one party, even if permitted by law, without disclosure to, all parties and the informed consent of, the REALTOR®’s client or clients.

Rationale:  Due to the practice changes outlined in the settlement agreement, there are now commonly situations where buyers have agreed in writing that their broker shall be compensated a certain amount, with the potential for some of that compensation coming from the listing side of the transaction and the buyer being responsible for any remaining compensation. In these scenarios, the buyer’s broker is being compensated by more than one party, however the Committee believes it is not necessary that the seller and their broker know what is contained in a contract in which they are not parties. This amendment maintains the ethical duty of disclosure to one’s client while making it clear that there is no obligation to disclose the contents of a buyer-broker agreement to sellers or their brokers.

2. Delete Standard of Practice 3-4: REALTORS®, acting as listing brokers, have an affirmative obligation to disclose the existence of dual or variable rate commission arrangements (i.e., listings where one amount of commission is payable if the listing broker’s firm is the procuring cause of sale/lease and a different amount of commission is payable if the sale/lease results through the efforts of the seller/landlord or a cooperating broker). The listing broker shall, as soon as practical, disclose the existence of such arrangements to potential cooperating brokers and shall, in response to inquiries from cooperating brokers, disclose the differential that would result in a cooperative transaction or in a sale/lease that results through the efforts of the seller/landlord. If the cooperating broker is a buyer/tenant representative, the buyer/tenant representative must disclose such information to their client before the client makes an offer to purchase or lease. (Amended 1/02)

Rationale: Standard of Practice 3-4’s requirement to disclose a variable rate commission was predicated on a unilateral offer of compensation in the MLS. Because of the practice changes due to the settlement agreement, cooperative compensation, if even offered, has become one variable in any number of variables involved in a negotiated transaction. The elimination of Standard of Practice 3-4 is another step in modernizing the Code with regard to these practice changes.

3. Amended Standard of Practice 17-4 to update the language to ensure compliance with the tenets of the settlement agreement:

Specific non-contractual disputes that are subject to arbitration pursuant to Article 17 are:

1. Where a listing broker has compensated a cooperating broker and another cooperating broker subsequently claims to be the procuring cause of the sale or lease. In such cases the complainant may name the first cooperating broker as respondent and arbitration may proceed without the listing broker being named as a respondent. When arbitration occurs between two (or more) cooperating brokers and where the listing broker is not a party, the amount in dispute and the amount of any potential resulting award is limited to the amount paid to the respondent by the listing broker, or the amount of compensation outlined within the terms of any valid buyer representation agreement between the buyer and the complainant, whichever is less, and any amount credited or paid to a party to the transaction at the direction of the respondent. Alternatively, if the complaint is brought against the listing broker, the listing broker may name the first cooperating broker as a third-party respondent. In either instance the decision of the hearing panel as to procuring cause shall be conclusive with respect to all current or subsequent claims of the parties for compensation arising out of the underlying cooperative transaction. (Adopted 1/97, Amended 1/07)
2. Where a buyer or tenant representative is compensated by the seller or landlord, and not by the listing broker, and the listing broker, as a result, reduces the commission owed by the seller or landlord and, subsequent to such actions, another cooperating broker claims to be the procuring cause of sale or lease. In such cases the complainant may name the first cooperating broker as respondent and arbitration may proceed without the listing broker being named as a respondent. When arbitration occurs between two (or more) cooperating brokers and where the listing broker is not a party, the amount in dispute and the amount of any potential resulting award is limited to the amount paid to the respondent by the seller or landlord, or the amount of compensation outlined within the terms of any valid buyer representation agreement between the buyer and the complainant, whichever is less, and any amount credited or paid to a party to the transaction at the direction of the respondent. Alternatively, if the complaint is brought against the listing broker, the listing broker may name the first cooperating broker as a third-party respondent. In either instance the decision of the hearing panel as to procuring cause shall be conclusive with respect to all current or subsequent claims of the parties for compensation arising out of the underlying cooperative transaction. (Adopted 1/97, Amended 1/07)
3. Where a buyer or tenant representative is compensated by the buyer or tenant and, as a result, the listing broker reduces the commission owed by the seller or landlord and, subsequent to such actions, another cooperating broker claims to be the procuring cause of sale or lease. In such cases the complainant may name the first cooperating broker as respondent and arbitration may proceed without the listing broker being named as a respondent. When arbitration occurs between two (or more) cooperating brokers and where the listing broker is not a party, the amount in dispute and the amount of any potential resulting award is limited to the amount paid to the respondent by the buyer or tenant, or the amount of compensation outlined within the terms of any valid buyer representation agreement between the buyer and the complainant, whichever is less. Alternatively, if the complaint is brought against the listing broker, the listing broker may name the first cooperating broker as a third-party respondent. In either instance the decision of the hearing panel as to procuring cause shall be conclusive with respect to all current or subsequent claims of the parties for compensation arising out of the underlying cooperative transaction. (Adopted 1/97)
4. Where two or more listing brokers claim entitlement to compensation pursuant to open listings with a seller or landlord who agrees to participate in arbitration (or who requests arbitration) and who agrees to be bound by the decision. In cases where one of the listing brokers has been compensated by the seller or landlord, the other listing broker, as complainant, may name the first listing broker as respondent and arbitration may proceed between the brokers. (Adopted 1/97)
5. Where a buyer or tenant representative is compensated by the seller or landlord, and not by the listing broker, and the listing broker, as a result, reduces the commission owed by the seller or landlord and, subsequent to such actions, claims to be the procuring cause of sale or lease. In such cases arbitration shall be between the listing broker and the buyer or tenant representative and the amount in dispute is limited to the amount of the reduction of commission to which the listing broker agreed. (Adopted 1/05)

Rationale: These amendments reinforce the settlement agreement by establishing that compensation awarded in arbitration may not exceed the amount outlined within the terms of the buyer representation agreement.

Shaded portions of the 2026 Code of Ethics and Arbitration Manual highlight all Manual changes so you’ll know what’s new.

Shannon Allen is an attorney and Florida Realtors Director of Local Association Services

Note: Advice deemed accurate on date of publication

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