Follow-up on an agency question
I reviewed the Mandatory Licensee-Consumer Disclosure, AKA “Agency Disclosure” after being baited by REMaven last month. One question, from Bob02657, stumped me, a little. After checking with the MAR legal hotline, here is his question and my answer:
Bob02657 wrote: Rona on the Mandatory Agency Disclosure form front page there are check spaces for: __ Buyer's Agent; __Seller's Agent, but no __ Dual Agent? On page two all types of agency are described
Bob,
In short, a licensee cannot start a professional relationship in dual agency. The licensee starts out as an agent to one party, or not an agent at all (facilitator.) There is a second form that licensees must get signed when dual agency arises.
Now some detail:
1. The disclosure is intended to explain to the consumer who the agent represents and what the representation requires of the agent. The disclosure is signed by the licensee, who can be a buyer’s or seller’s agent or facilitator (non-agent.)
2. If the licensee intends to become a designated buyer’s or seller’s agent, “buyer’s agent” or “seller’s agent” gets checked off. At the time of signature, the licensee has no transaction with a conflict, since you are just getting started. Later, the company can go into dual agency by having two designated agents who are on opposite sides of a transaction. At that point, there is another required disclosure.
3. Facilitators are non-agents from the beginning. That is why they are a different category. They don’t give advice about price and terms. They are not bound to confidentiality, either.
4. A licensee wouldn’t take on a client if there was already a dual agency conflict. If a licensee wanted to buy an unlisted house, one would hope the licensee would forego taking it as a listing.
5. The “old fashioned” way to be in dual agency is if a licensee has a listing, but decides later to buy it or has a family member who wants to buy it. I, as a buyer’s agent, could be in dual agency if I chose to put an Offer on a property that one of my clients is also making an Offer on.
I called the MAR legal hotline to be sure I was standing on solid ground here. MAR agreed that a licensee would not start a client relationship in dual agency. That’s why it isn’t on the form. Dual agency happens based on a change in the relationship between the licensee and the principals through the transaction.
Are there more questions about this? Did you see the right disclosure at the right time?
