15.2 Articles 5–9: Professional Relations, Contracts, Conflicts & Assets

Article 5 — Relations with Other Members of the Profession

Article 5 prohibits making, authorizing, or encouraging false or misleading comments about the practices of IREM members. A member must truthfully represent material facts in professional activities and must not exaggerate or misrepresent offered services compared with other real estate managers. The Code expressly preserves legal and reasonable business competition.

A manager may explain verifiable differences in experience, staffing, systems, price, reporting, or service. The manager should not invent a competitor's violations, circulate an unverified rumor, or claim guaranteed performance that cannot be supported. If a proposal says the firm reconciles every client bank account monthly, operational practice should match.

The article does not ban comparison, criticism based on reliable facts, or vigorous competition. Separate opinion from fact, verify significant claims, correct mistakes, and retain support for representations.

Article 6 — Contracts

Any written contract between a member and client must be clear and understandable and set out the specific agreed terms, including a general description of the services and member responsibilities. A property management agreement should make operational authority visible rather than bury it in ambiguity.

Relevant terms may include property and parties, scope, standard of service, term and termination, compensation, reporting, bank authority, spending limits, insurance, records, employees, contractors, emergency action, indemnity, dispute provisions, and transition duties. Article 6 does not supply universal contract language. Governing law and the negotiated agreement determine enforceability, so use authorized legal forms and review.

Do not perform an undisclosed service or rely on a side promise that conflicts with the signed agreement. Amendments should follow the contract's approval method. Before acting, the ARM should know which decisions are delegated and which remain with the client.

Example

The agreement permits routine repairs to $5,000 but reserves capital work. A $12,000 planned replacement is not converted into routine authority by dividing it into three invoices. Seek client approval. A true emergency may invoke separate written emergency authority, followed by required notice and records.

Article 7 — Conflict of Interest

A member may not represent personal or business interests divergent from or conflicting with those of the client, employer, or firm. Nor may the member accept directly or indirectly any rebate, fee, commission, discount, or other benefit, monetary or otherwise, that could reasonably be seen as a conflict, unless the affected client, employer, and/or firm is first notified in writing and consents in writing.

The test includes appearance from a reasonable perspective, not only proven financial harm. Conflicts can arise through ownership in a vendor, family relationships, referral payments, gifts, investment interests, outside employment, competing clients, or use of client opportunities.

The Code requires notice and consent in writing before the representation or benefit. Disclosure should be specific enough for an informed decision: relationship, financial interest or benefit, proposed transaction, alternatives, and effect. Written consent does not override law, procurement rules, contract limits, or duties to another affected party. Multiple parties may need notice.

Do not state a universal gift-dollar threshold unless an applicable employer policy or law creates one. A modest benefit can be problematic in context; a disclosed, client-approved arrangement may still require competitive procurement and fair pricing.

Article 8 — Managing the Assets of the Client

Article 8 requires due diligence in maintenance and management and reasonable efforts to protect client assets against reasonably foreseeable contingencies and losses. Duties must uphold the client's trust and confidence.

Assets include land, buildings, systems, funds, records, contracts, reputation, access controls, and business information. Due diligence is a process: inspect, maintain, budget, monitor, insure, document, and escalate. It does not guarantee that every loss is preventable.

A manager who learns that a fire panel is impaired should follow emergency and impairment procedures, notify appropriate parties, obtain qualified repair, document temporary controls, and track closure. A manager who quietly defers it to meet budget fails to balance cost with foreseeable safety and asset risk.

Article 8 connects to preventive maintenance, risk management, contractor control, insurance, emergency planning, and capital forecasting. The manager should tell the client when resources or authority are inadequate and document the consequence of deferred action.

Article 9 — Duty to Former Clients and Former Firms or Employers

The Code applies its obligations and duties to relationships with former clients and former firms or employers. The member must act professionally when relationships terminate. However, Article 9 does not require breaching obligations to current clients or the current firm or employer, except when law or regulation requires or compels it.

At transition, return and transfer property, funds, records, keys, credentials, and open matters as authorized; reconcile accounts; preserve required information; and avoid sabotage or disparagement. Do not retain confidential files for personal advantage or destroy evidence. At the same time, do not hand a former employer information belonging to a current client merely because of a past relationship.

Termination does not erase applicable confidentiality or accounting duties. The exact transfer follows the management agreement, client authority, law, and record-retention or hold requirements.

Integrated conflict method

When a potential conflict appears:

1. identify every affected client, employer, or firm;
2. pause commitment where feasible;
3. gather facts and applicable policy;
4. provide prior written notice with material information;
5. obtain required written consent from authorized parties;
6. follow procurement, contract, and legal controls;
7. document the decision; and
8. monitor the arrangement.

If consent is refused or duties cannot be reconciled, decline or withdraw from the conflicting activity through an orderly authorized process.

Exam approach

Match the fact pattern to the current article. False competitor claim points to Article 5; unclear client contract to Article 6; vendor or personal interest to Article 7; foreseeable asset loss to Article 8; transition duties to Article 9. Avoid invented rules such as mandatory sealed bids or a fixed rebate percentage unless the scenario provides them.