Professional Conduct, Ethics, and Risk Management
Core Concepts
Candidates must understand the ethical standards set by the NSREC, including honesty, integrity, and professionalism. You should know the Code of Ethics and the consequences of misconduct. Also, understand risk management strategies: documentation, communication, disclosure, and avoiding conflicts of interest. Know the importance of errors and omissions insurance and the requirement to report claims. Also, be familiar with the complaints and discipline process.
Traps in Questions
A common trap is the handling of confidential information – you must not disclose it without consent, even after the transaction closes. Another trap is the acceptance of gifts or referral fees without disclosure. Also, questions may test the obligation to report another licensee's misconduct – you are required to report breaches of the Act or Code of Ethics.
Worked Example / Rule of Thumb
Rule: Always document your communications and disclosures in writing. For example, if a seller tells you about a latent defect, you must disclose it to potential buyers in writing. If you fail to do so, you could be liable for misrepresentation.
Additional Concepts
Understand the role of the NSREC in enforcing the Code of Ethics and the disciplinary actions it can take (fines, suspension, revocation). Also, know the requirement for continuing education and the maintenance of competence.