Ethics: Fiduciary Duty and the IREM Code of Professional Ethics
Ethics on the ACoM exam tests how you handle conflicts, confidential information, owner funds, and fair dealing under the IREM Code of Professional Ethics. The exam expects fiduciary conduct: loyalty, disclosure, accounting integrity, and avoidance of even the appearance of impropriety.
Core rules and concepts
- Fiduciary duty includes loyalty, obedience to lawful owner instructions, disclosure, confidentiality, and accurate accounting.
- Avoid conflicts of interest; disclose them in writing; recuse yourself when a conflict is material.
- Never commingle owner or tenant funds with company or personal funds; maintain separate accounts and an audit trail.
- Deal fairly with tenants, vendors, and applicants; do not discriminate or accept kickbacks.
- Accept work only within your competence; obtain qualified support when needed.
- Gifts: nominal hospitality may be acceptable if disclosed and not intended to influence a decision; cash or lavish gifts are not.
Worked example
A property manager is offered two premium tickets to a vendor's suite while that vendor is bidding on a $400,000 HVAC contract. The manager should decline or, if attending, disclose the gift to the owner and ensure the bid is evaluated on merit. If the gift could reasonably influence judgment, decline. Document the disclosure and keep procurement records. Reasoning: fiduciary loyalty and the appearance of impropriety matter; owner consent after full disclosure may permit nominal hospitality, but procurement integrity is paramount.
Traps that cost marks
- Accepting gifts and labeling them marketing.
- Sharing one owner's financials with a competing owner.
- Using an unlicensed contractor for convenience.
- Retaliating against a whistleblower.
- Signing a lease amendment without owner authority.