ethics

Property Managers’ Guide to Ethics in Real Estate

Making good decisions within peer-to-peer relationships
Tuesday, January 23, 2018

Even the most seasoned property managers find good decision-making to be a life-long learning experience in an ever-changing industry. While there are basic rules to knowing what is right and wrong, peer-to-peer dilemmas are ripe with grey areas that require closer examination and a lot of well-tuned gut instinct.

For Gareth Jones, faculty member and national vice-president of corporate development at the Real Estate Institute of Canada (REIC), respect and trust are key components when it comes to ethics and decision making.

“If you have strong integrity and character, and demonstrate true leadership, people will know what to expect from you,” he says. “A leader strives to consider all the people impacted by a decision, which creates confidence and trust among your peers and in the industry. The consequences of any decision will be far-reaching, and you may be setting a precedent for others to follow. You must be consistent in your approach to decision making.”

To help position property managers as industry leaders and enhance their professional ethics, REIC offers the CERTIFIED PROPERTY MANAGER® (CPM®) and ACCREDITED RESIDENTIAL MANAGER® (ARM®) designation programs. At the core of both programs is a strong understanding of professional codes of ethics and business standards. Ethics in Business Practice is a required course for both programs, and helps students develop ethical values and refine their decision-making skills using real-world situations. The course also highlights fiduciary duties to clients, including confidentiality, full accountability, protecting best interests, disclosure, loyalty etc. The course also examines duties owed to third parties, including tenants and contractors.

Here are just a few items the course delves into:

Going Beyond Basic Codes

Regulatory Codes provide the basic guidelines for making the right decisions, but conclusions are not always black and white. Codes are intentionally vaguely written to allow interpretation and application in a variety of situations. It would be impossible to write a code that covers every scenario.

“Good property managers know that they may have the legal right to do something, but will ask themselves if it’s the best decision to make. They take their responsibility to the next level,” says Jones.

Law is the bare minimum, designed to level the playing field. From there, property managers should always analyze the whole situation, discover the facts, understand the consequences of their actions, and know who the decision will impact. Ensuring there is fairness and respect of all parties involved is of upmost importance. There is always opportunity to rationalize decisions, making them self-directed and to your benefit. A true leader always demonstrates respect for the other parties, making decisions inclusive of other positions.

It also helps to know one’s personal values, customs and traits, as well as the culture and values of an employer, what is expected of them, and the morals which society imposes on people inside and outside of business.

Courts will often look at the consequences and impact of a decision – asking if a property manager explored all alternatives and collected all the facts.

“If your gut tells you something is wrong you should re-examine the situation.”

Building Trust and Character

“Quite often,” says Jones, “dilemmas can arise when there are two different property managers. One may have lost a contract or is seeking a contract for a property they didn’t previously acquire, and may feel the need to “put down” the skills and integrity of another property manager relating to fees, services, or how they conduct their business.

Making derogatory comments about professionals within a business is not a good way to handle things,” he cautions. “You have to be very careful in the business community because these situations tend to come back and haunt you. It’s a smaller world than you can possibly imagine. Making such comments shallows your short-term thinking. You want to be better than that, rise above and remain professional at all times.”

The biggest asset in property management is your reputation. It steers your career path.

Be Qualified

Part of ethical decision-making requires management professionals to be qualified. Most real estate codes state that individuals should not step out of their areas of expertise.

“If you don’t have the expertise to complete a task, don’t do it,” says Jones. “People will get lured into the completion of a transaction because they have a certain title like property manager, but you should never pretend you’re something you’re not – and always be prepared to call in qualified help when you need it.”

Courts and professional standard committees are clamping down on professionalism, knowledge, skills and expertise to ensure that competent services, knowledge, skills, disclosures, fairness and loyalty are provided to clients who entrust their property manager to look after their asset. It is becoming increasingly important to remain qualified and to conduct yourself with absolute honesty and integrity.

In order to be truly successful at what you do, ask yourself these two questions:

  • What do you know about your job, and what expertise and technical skills are required?
  • How do you do your job? This extends to reputation, credibility and respect and trust for others and oneself.

What Are Your Goals?

When thinking about human interaction and conducting business with other people, property managers should be able to identify their goals and come to a decision. Let these goals lead you to your decision. Here are three points that act as a methodology for arriving at the right decision:

  • Strive to do good or, at least, do no harm. Ask how the decision makes you feel about yourself.
  • Make sure whatever you’re doing is legal and complies with all existing codes of ethics, laws, policies and professional standards.
  • Respect all individuals involved in the decision-making process, and ensure that it is balanced and fair.

Those who endeavor to meet ethical standards set themselves apart from others in the industry.

“When you are acting as a legal agent and your client is putting their trust in you as their fiduciary, court findings show that you may or may not have known about a situation, but you ought to have known,” says Jones. “The courts are finding people just as guilty for their inactions as they are for their actions.”

To learn more about the Ethics in Business course and the CERTIFIED PROPERTY MANAGER® (CPM®) and ACCREDITED RESIDENTIAL MANAGER® (ARM®) designation programs, please visit: www.reic.ca

 

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