IS THE CODE OF ETHICS TRULY ABOUT ETHICS?

By Neil Gill

Is the Code of Ethics created under the Real Estate and Business Brokers Act (REBBA) (soon to be The Trust in Real Estate Services Act (TRESA)) truly about ethics?

The term “ethics” is generally defined as a group of moral principles that govern a person’s behaviour or conduct. 

Moral principles are concerned with the principles of right or wrong and the goodness or badness of human character.

It is not a stretch to state that most of us work on the assumption that ethical and moral behaviour are one and the same and that a breach of ethics or morality must involve some form of moral turpitude or, more simply, some form of dishonesty or immorality.

It is not without surprise that registrants governed by the provisions of REBBA, and therefore, its Code of Ethics, who are alleged to have run afoul of the Code are almost without exception somewhat dismayed to find that the so-called Code of Ethics is, arguably, not just a tool to be used by the Regulator to govern matters of moral turpitude but is, in fact, also used to regulate conduct that does not involve, what any reasonable registrant, or member of the public, would consider something to constitute any dishonesty, or “moral turpitude,” on behalf of the registrant.

Like it or not the Code of Ethics, and the disciplinary framework that has developed around it over the years is being utilized to govern, and punish, not only immoral behaviour but also conduct that most reasonable people would interpret as constituting errors or omissions. 

Registrants who make honest errors or mistakes, perhaps sometimes carelessly, or perhaps even negligently are being prosecuted under the provisions of the Code of Ethics, even if there is no badge of dishonesty, intention, or moral turpitude.  

What, perhaps, is even more surprising, is that all registrants are required to have minimum levels of errors and omissions insurance in place to address mistakes made by them during the day-to-day operation of their real estate practices.

I am not being flippant when I surmise that it is highly unlikely that a busy realtor, during his or her career, will not make a mistake now and again, procedural, or otherwise.

This begs the question of whether the governing body should concern itself, with the honest errors or mistakes made by registrants, in the absence of evidence of any dishonesty or as stated above “moral turpitude.” This is not to say that some mistakes don’t rise to the level where ethics may be at issue because of gross negligence or repeated conduct. In these cases, the level of willful blindness, blatant disregard for the Code of Ethics or unwillingness to learn may be a question of ethics.  

Wouldn’t the mandate of protecting the public interest be more adequately served by utilizing their limited resources to focus on the investigation and prosecution of complaints involving breaches of ethics and morality?

The purpose of this short article is not to provide any answer to that question because to do so is counterproductive.

As much as my experience shows that most registrants agree that this should be the case, the actual reality of the situation is that title “Code of Ethics” may simply be a misnomer as the provisions of the Code arguably go well beyond matters involving ethical considerations.

The Real Estate Counsel of Ontario (RECO) may not be acting outside of the scope of its jurisdiction when making decisions on matters that it feels should be prosecuted under this Code. 

If this is correct, the government of Ontario is responsible for the wording of the legislation from which RECO obtains its mandate, so perhaps any concerns should be focused on the legislator.

The provisions of the Code (both the existing code and the revised code to be implemented in April 2023) provide for the governance of matters of competency and not just morality. 

The governing body may very well be within the legislative framework when it chooses to prosecute complaints involving registrants who make mistakes, or who have been alleged to have been negligent in the provision of real estate services, but perhaps the title would be more accurate, and somewhat less misleading if it was called a Code of Conduct and Competence as opposed to a Code of Ethics.

In any case, do not be fooled by the title. 

RECO does not limit the scope of the Code of Ethics to questions about morality. It is also about competence. Although the regulations do make a distinction between the two, for the most part, the language of the Code is broad enough that it can be interpreted as allowing for the prosecution of both moral/ethical breaches as well as honest mistakes. 

Just because you have errors and omissions insurance to provide a defence and coverage in civil suits does not mean that you cannot also be brought before RECO under the Act for the same alleged mistakes and, unfortunately, in the disciplinary cases before RECO, you do not have insurance coverage.