Disclosure of Family Interest
Article 4, Part 4
At the hearing, REALTOR® A defended his actions stating that Article 4 of the Code requires disclosure when the purchaser is a member of the REALTOR's® immediate family, and that his father-in-law was not a member of REALTOR® A’s immediate family. REALTOR® A also demonstrated that he had presented two other offers to Client B, both lower than Buyer C’s offer, and stated that, in his opinion, the price paid by Buyer C had been the fair market price.
REALTOR® A’s defense was found by the Hearing Panel to be inadequate. The panel concluded that Article 4 forbids a REALTOR® to “acquire an interest in” property listed with him unless the interest is disclosed to the seller or the seller’s agent; that the possibility, even remote, of REALTOR® A’s acquiring an interest in the property from his father-in-law by inheritance gave the REALTOR® a potential interest in it; that REALTOR® A’s conduct was clearly contrary to the intent of Article 4, since interest in property created through a family relationship can be closer and more tangible than through a corporate relationship which is cited in the Code as an interest requiring disclosure. REALTOR® A was found to have violated Article 4 for failing to disclose to Client B that the buyer was his father-in-law.