As a lawyer, manager of a brokerage and a member of the Real Estate Institute of Canada (REIC), I’m surrounded by rules of professional conduct and codes of ethics. All my actions – whether they’re related to my work or not – are filtered through not only the Law Society’s Rules of Professional Conduct but also the Real Estate and Business Broker’s Act and REIC’s Code of Ethics. While this seems like quite the process, I discovered that being ethical is just as good as having a lawyer on demand.
If you practice ethical behavior consistently – from how you act with your family members to how you treat your clients and other real estate professionals – you’ll become “lawsuit-proof”. This is because you develop a very strong intuition around what is ethical and what is legal.
Intuition, as it turns out, isn’t magic. Rather, it’s our brain quickly spitting out a mass amount of information we’ve gathered and analyzed through years of repeated actions. An example of this is when you “just knew” that the deal was going to fall apart or that the buyer wasn’t serious. Your gut instinct is not magic. It’s your unconscious brain picking up on numerous cues, which trigger a “gut reaction” you’ve had in the past to those very same cues.
Given how intuition works, it follows that developing a “legal mind” and lawsuit radar can be done through memorizing the code and practicing ethical behaviour. The problem in doing this, however, is that ethical behaviour isn’t clear cut and memorizing the code is not an easy or immediate solution. Given these obstacles, I use Institute of Real Estate Management’s “Five Question Method”. By consistent application of these five questions, I am not only able to clarify and examine ethical issues, but I’m also able to access a “built-in mini lawyer”. The questions are:
- Is it illegal?
- Who is affected by your decision? And how?
- What are the consequences of the decision?
- How do you feel about the situation?
- Have you examined all the alternatives?
If this is too difficult, then an even simpler question to guide you is: “Would you like to see your action talked about on the front page of your local newspaper?” If the answer is “no”, it is likely unethical and possibly a breach of the law.
Natalka Falcomer is a lawyer, real estate broker and Certified Leasing Officer who started her real estate career in private equity. She created, hosted and co-produced a popular legal call-in show on Rogers TV and founded and recently sold Groundworks, a firm specializing in commercial leasing law. She is currently the Chief Real Estate Officer of Houseful.ca, leading the development and expansion of the company’s personalized home buying and selling experience for the Canadian market. She sits as an advisor on NAR REACH Canada and is the former multi-year board member of the Ontario Trillium Foundation.
