Magazine article Journal of Property Management

IREM Is Built on Ethics: For 75 Years the Institute and Its Members Have Subscribed to the Highest Standards

Magazine article Journal of Property Management

IREM Is Built on Ethics: For 75 Years the Institute and Its Members Have Subscribed to the Highest Standards

Article excerpt

Today the Institute of Real Estate Management is best known for education. However, it is important to remember that IREM was formed on a foundation of ethical business practices in the management of real estate. While education may be the heart the Institute, the IREM Code of Ethics is certainly the backbone.

"IREM Members are proud to adhere to a Code of Professional Ethics that sets some of the strongest standards of business conduct of any organization in the world today," said Carl York, CPM, who also sits on the IREM Ethics and Discipline Committee.

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IREM was created in January 1933, when 14 individuals attended a meeting of the National Association of Real Estate Boards (NAREB, today the NATIONAL Association OF REATORS[R]) in Washington, D.C. They expressed concerns about the abuses by real estate firms who had the financial responsibility of managing property for others. Five months later, 100 real estate management firms joined together and petitioned NAREB to form IREM, and permission was granted on June 12, 1933- On July 10, 1934 Illinois granted the association charter.

At the first recorded meeting of the Institute on October 5, 1933 the participants reviewed the new bylaws, which set the following organizational goals:

* The establishment of a code of ethics and standards of practice.

* The identification and registration of responsible and competent managers, and management agents of real estate.

* The establishment of coordinated standards and units for scientific recording of the experience in the management of real estate.

* The exchange of management experience.

* In general, the fostering of knowledge, integrity and efficiency in the management of real estate.

Each founding member firm was required to follow certain ethical standards of practice. Specifically, each firm agreed to set up separate accounts for its funds and those of its clients to avoid commingling funds, to carry a fidelity bond for employees who handled money, and to refrain from reaping financial benefit from the use of a client's funds without full disclosure. To enforce these practices, the Ethics and Discipline Committee was formed in 1935.

For the first five years IREM Members were organizations rather than individuals. But in 1938 the founders of IREM agreed that accrediting individual real estate managers was more fundamental and beneficial than simply recognizing the integrity of management firms. They reasoned that standards of a management firm can change as staff changes, but the standards of individuals generally apply throughout managers' lives. To reflect that logic, the Institute changed the bylaws to permit individual membership and created the CERTIFIED PROPERTY MANAGER (CPM) designation to acknowledge individual professional achievement.

The CPM membership was approved with rules of conduct presented in 1940, and the first CPM Code was approved in 1959. According to this code, a CPM must subscribe to a Code of Professional Ethics, complete a series of real estate management courses and work in the profession for a specified number of years while managing a portfolio of a required size. More than 20,000 individuals have achieved the CPM designation to date, and more than 8,600 CPM Members of IREM are actively engaged in real estate property and asset management. These professionals manage more than $848 billion of real estate assets.

The 1970s and 1980s were a time of rapid membership growth, and rather than just awarding a certificate and a copy of the code to hang in an office, IREM leadership decided that all new CPM Candidates needed to possess a better understanding of the code they pledged themselves to. …

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