INSIDE IREM KNOW YOUR CODE
Know Your IrEM CodE of
ProfEssIonal EthICs: maintaining Loyalty
SpaniSh philoSopher, GeorGe
Santayana, once Said, “thoSe who
cannot learn from hiStory are
doomed to repeat it.” This famous
quote reminds us that there are lessons to be
learned from studying cases heard before the
Ethics Hearing and Discipline Board. One of
the most cited infractions of the IREM Code
of Professional Ethics is the accusation of “
stolen clients,” which violates Article I: Loyalty to
Client, Firm, and/or Employer. Article I states:
Larry
Baiamonte,
CPm® (baiamol@
nationwide.
com), is a
senior investment ProfessionaL, reaL
estate equities,
with nationwide
insuranCe in
CoLumBus, ohio.
A Certified Property Manager®, CPM®
Candidate, Accredited Residential
Manager®, Accredited Commercial
Manager or Associate Member (herein referred
to as Member) shall at all times exercise loyalty
to the interests of the client and the employer
or firm with whom the Member is affiliated. A
Member shall be diligent in the maintenance
and protection of the interests and property of
the employer and of the client. A Member shall
not engage in any activity that could be reasonably construed as contrary to the interests of the
client or employer. If an activity would result
in a conflict between the interests of the firm or
employer and the interests of the client, then the
interests of the client shall take precedence.
employment contract at the time and assisted
the candidate in forming a new management
firm using the current employer’s clients.
• A CPM Candidate was suspended for failing
to disclose to the employer knowledge of a
client’s intention to discontinue its management agreement. The board was clear in its
decision that the candidate’s formation of a
new management company in itself was not a
violation and that the candidate did not solicit
the client’s business.
• A CPM Candidate was suspended for soliciting clients from the employer to start a new
management business. The candidate had proposed a business plan to the employer suggesting dividing the management into two firms.
Although this plan was not formally accepted
by the employer, the candidate moved ahead
with formation of a second firm and contacted
clients to move to the new firm.
This Article states that members cannot con-
duct any activity that would not be in the best
interests of their current firms or employers,
such as discussing the terms that a new firm or
employer may wish to offer a client. Here are a
few examples of cases involving stolen clients:
• A CPM and a CPM Candidate were suspended
for soliciting the clients of their employer in
violation of Article I. The CPM was under an
In each one of these cases, the accused mem-
bers did not act in the best interests of their cur-
rent firms or employers. They failed to disclose,
or acted secretly, to solicit clients for a new
management company or attempted to man-
age properties independently. Forming a new
management company was not itself viewed as
a violation, but rather the act of soliciting clients
from the members’ current firms, or failing to
inform current employers of a client’s intention
to terminate a current management account.
