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About Agency Disclosure
Dual vs. Single Agency Relationships in Real Estate (The Balance, Jun. 8, 2021)
“Many states require that agents give buyers and sellers an agency disclosure form to sign, which clears up these questions. The form used in California, for example, is not a contract between two parties but rather a disclosure from one to the other. It clarifies the many types of agency functions that may come up when buying or selling a home and specifies the rules agents must adhere to. All parties must read it so they know what to expect from each other; the form also allows them to select the type of agency relationship they prefer”
Agency Relationships in Real Estate: What You Need to Know (The CE Shop, Mar. 11, 2020)
Though clients to not often have to sign legal documents, making sure they understand your roles and responsibilities as their agent is your fiduciary duty. Agency relationships are formed between you, the other agent, and the buyers or sellers – this disclosure statement is intended to ensure you are acting in your clients best interests.
Real Estate Agency Law: How Agency is Created (The Balance, Oct. 9, 2019)
Not only there different types of agency – think single vs. dual – but there are also different ways to disclose and express your agency. Express agency is explicitly state in a written or oral contract, while implied agency is exactly that, implied by actions but not words. No matter what, sure you explicitly disclose if you are a dual agent.
Buyer’s Broker Agreements and Contracts (The Balance, Sep. 25, 2021)
Before writing a purchase agreement, homebuyers usually sign a contract with their agent known as “buyer representation agreements.” The three most common types of buyer representation agreements are; non-exclusive/not-for-compensation agreement, the non-exclusive/right to represent agreement, and the exclusive right to represent agreement. Non-exclusive agreements usually last a few months, while exclusive agreements sometimes last up to a year.
Broker Denied Commission for Lack of Written Agreement (National Association of REALTORS®, Aug. 6, 2021)
“A New York federal district court granted summary judgment in favor of a seller, ruling against a business broker’s breach of contract and commission claim because New Jersey law requires business brokers to adhere to the Statute of Frauds and to explicitly stipulate if a broker is to receive commissions for a sale they did not cause.”
Creating a Records Retention Program for Brokerages (National Association of REALTORS®)
“So, how do you create a document retention program? First, understand that a record retention policy pertains to “business records”. A business record is something that has operational, legal, fiscal, or historical value to the business. A business record is not limited to just paper files, but it could be something in any format- a data file, voicemail, or video recording.”
The law is a living and breathing organism that is always changing, so be sure to check with your state or territory’s statutory code for the most up-to-date information on agency laws in your state. Or, if you are a REALTOR®, contact your state association of REALTORS®’ legal hotline. To find your state association, please visit this page and select your state from the list.
The Do’s and Don’ts of Dual Agency (Chicago Association of REALTORS®, Jun. 30, 2021)
“Illinois has three different types of agency relationships with consumers: No Agency, Designated Agency and Dual Agency. It is important to know that no matter which agency relationship you have with a client or consumer, all of them have a requirement of written disclosure or notice. Further, while we will discuss this from a for sale transaction scenario, everything being mentioned also pertains to rental transactions. The License Act and agency disclosure requirements make no distinction between the two.”
Dual Agency in Real Estate (Forbes, Jun. 7, 2021)
According to a report published in 2019 by the Consumer Federation of America, more than half of homebuyers and sellers in America are unaware that there are different types of agencies for real estate agents. Dual agency is regulated by law and is illegal in some states, but often comes down to what the homebuyer or seller is comfortable with, after the real estate agent has disclosed their agency type.
The Dual Agency Controversy: Why Some States Ban Agents from Representing Both Buyer and Seller (Homelight, Apr. 29, 2021)
“Opponents of dual agency don’t believe an agent can represent both the seller and the buyer without compromising the best interests of one, or both parties. Among those opponents are the eight states that have made dual agency illegal: Alaska, Colorado, Florida, Kansas, Maryland, Texas, Wyoming, and Vermont. Proponents do not believe that dual agency inherently compromises consumers’ interests. They even argue that dual agency can make a transaction more efficient.”
Disclosure Materials From Your State
The laws and regulations for agency disclosure may vary from state to state. As a member of the National Association of REALTORS®, you can contact your State Association of REALTORS® for specific details on your state's disclosure requirements. The National Association of REALTORS® collects information on state specific legal issues in the State Issues Tracker:
What Are You Required to Disclose When You Sell Your Home? (Homelight, Nov. 12, 2020)
National Association of REALTOR®'s State Issues Tracker (See: Agency)
Who Does Your Agent Represent? (The CS Realty Team, Sep. 29, 2020)
Dual Agency Laws for Real Estate Agents in Arizona (MacQueen & Gottlieb, PLC, Jan. 15, 2020)
South Carolina Disclosure of Real Estate Brokerage Relationships (The Hoffman Group, May 8, 2019)
The Disclosure Regarding Real Estate Agency Relationship – The California-Required Disclosure Before Hiring an Agent (Globella Buyers Realty, Mar. 28, 2019)
Redesigned “The Consumer’s Guide to Real Estate Agency in Illinois” Now Available to Order (Illinois Association of REALTORS®, Mar. 20, 2019)
Some state real estate commissions have included helpful materials on their websites regarding agency disclosure. A few examples:
Commonwealth of Virginia Division of Real Estate and Professional Licensing Forms and Agency Disclosure Statement
State of Ohio Department of Commerce Division of Real Estate and Professional Licensing Forms
Agency Legal Cases
The below cases all address agency issues in some way, often dealing with the breach of fiduciary duty and/or buyer representation.
Case Interpretations Related to Article 16 (National Association of REALTORS®, Jan. 1, 2021)
Agency Highlights: 1Q 2020 – Legal Pulse (National Association of REALTORS®, Aug. 28, 2020)
The Best of the Legal Hotline: Agency Revisited (Wisconsin REALTORS® Association, May 13, 2019)
Broker Can’t Limit Statutory Duties (National Association of REALTORS®, Apr. 24, 2019)
Agency Highlights: 4Q 2018 – Legal Pulse (National Association of REALTORS®, Apr. 16, 2019)
eBooks & Other Resources
The following eBooks and digital audiobooks are available to NAR members:
Real Estate Salespeople, Beware! (eBook)
Get It Together (eBook)
The Real Estate Entrepreneur (eBook)
Books, Videos, Research Reports & More
The resources below are available for loan through Member Support. Up to three books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10. Call Member Support at 800-874-6500 for assistance.
Digest of Real Estate License Laws and Current Issues (Lake City, UT: Arello (published annually) HD 1383 N21d
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