2026 NAR Code of Ethics Changes: A Complete Guide for Real Estate Professionals

What are the main changes to the NAR Code of Ethics in 2026?

The 2026 NAR Code of Ethics updates focus heavily on modernizing compensation rules following recent industry settlement agreements. The major changes include amending Article 7 to limit compensation disclosures strictly to clients, completely deleting Standard of Practice 3-4 regarding variable rate commissions, and updating Standard of Practice 17-4 to cap arbitration awards based on buyer representation agreements.

How Article 7 Changes Compensation Disclosures in 2026

What is the new rule for Article 7? Effective January 1, 2026, Article 7 is amended to limit the disclosure and approval requirements regarding compensation exclusively to a REALTOR®'s own client or clients. REALTORS® cannot accept compensation from more than one party without disclosure to, and the informed consent of, their client.

Why it matters for agents:

• Due to settlement agreement practice changes, buyers often agree in writing that their broker will be compensated a specific amount.

• Some of this compensation may come from the listing side, leaving the buyer responsible for the remaining balance.

• The Professional Standards Committee determined that sellers and listing brokers do not need to know the specific contents of a buyer-broker agreement to which they are not a party.

• This update maintains your ethical duty of disclosure to your own client while making it clear there is no obligation to disclose buyer-broker agreement details to the opposing

  side.

The Elimination of Standard of Practice 3-4

What happened to SOP 3-4? Standard of Practice 3-4 has been entirely deleted for the 2026 calendar year. Previously, this rule required listing brokers to affirmatively disclose the existence of dual or variable rate commission arrangements to cooperating brokers.

Why it matters for agents:

• The old requirement was built around the historic practice of making unilateral offers of compensation in the MLS.

• Under the new settlement rules, cooperative compensation—if it is even offered—is now just one of many variables in a negotiated real estate transaction.

• Eliminating SOP 3-4 is a direct step to modernize the Code of Ethics in response to these fundamental industry practice changes.

Standard of Practice 17-4: New Arbitration Limits

How are arbitration disputes handled under the 2026 rules? Standard of Practice 17-4 has been updated to ensure strict compliance with the tenets of the settlement agreement. The updates clarify how non-contractual disputes involving procuring cause and compensation are resolved.

Key Arbitration Updates:

• Caps on Arbitration Awards: When arbitration occurs between cooperating brokers (where the listing broker is not a party), the disputed amount and potential award are strictly limited.

• The "Whichever is Less" Rule: The award cannot exceed the amount paid to the respondent (by the listing broker, seller, or buyer) or the compensation outlined in a valid buyer representation agreement between the complainant and the buyer—whichever is less.

• Listing Broker Disputes: If a buyer/tenant representative is compensated directly by the seller/landlord, causing the listing broker to reduce their commission, arbitration shall be between the listing broker and the representative. The disputed amount is limited strictly to the commission reduction the listing broker agreed to.

• The Bottom Line: These amendments reinforce the rule that compensation awarded in an arbitration hearing may never exceed the terms agreed upon within the buyer representation agreement.

What do you think about these changes to the Code of Ethics? Leave a comment below or discuss with a colleague in an upcoming CE Class!

References

National Association of REALTORS®, "Summary of Professional Standards Changes effective January 1, 2026".