Maryland Agency Disclosure

Charles A. Kasky, Esq., RCE

Vice President of Legal Affairs

Maryland Association of REALTORS®

Agency Law – Real Estate

• Basic to defining the rights and obligations of agents and brokers

• Duty of Loyalty• Sub-Agency is still relevant

• Vicarious Liability

• Agency vs. Contract

Maryland Law - ResidentialAPPLIES TO:• The sale or lease of real property improved

by one, two, three or four single-family units

• Unimproved real property zoned for residential use by the local zoning authority of the county or municipality in which the real property is located

• Lease of more than 125 days

Two Questions

• Who Am I?•Who Do I Represent?

• Does Everyone I Meet During the Transaction Know Who I Represent?

•Have Understanding Whom…Form

Fundamental Principles

• Consumer Protection• The need to protect consumers from being

taken advantage of

• Most Important When You are Their Agent…..Not!!

• Whenever This Happens - DISCLOSE

Who Am I?

• Presumed Buyer Agent •No Written Agreement

• Buyer Agent• Seller Agent• Cooperating Agent• Intra-company Agent / Dual Agent

“Presumed” Buyer Agency

Licensee who assists a prospective buyer in locating residential real estate and is neither affiliated with nor acting as the listing real estate broker, is presumed to be acting as the buyer’s agent unless either the licensee or the buyer or lessee expressly declines

“Presumed” Buyer Agency

At first meeting of licensee and buyer/lessee:

• Orally advise prospective buyer or lessee that licensee will act as buyer’s or lessee’s agent in locating residential real estate

• Agency exists unless buyer or lessee declines

“Presumed” Buyer Agency

• Licensee acting as buyer’s or lessee’s agent with no written agreement shall comply with agency disclosure requirements and has duties as required by law. • Same duties as owed by all licensees

“Presumed” Buyer Agency

At First Meeting• Provide the prospective buyer or lessee with

a copy of the disclosure form required by law

• Buyer Signs?

“Presumed” Buyer Agency

• Property not listed with agent’s company• Property listed with agent’s company

• Seller’s Agent• Intra-company agent?

“Presumed” Buyer Agency

At First Contact w/ Seller or Agent• “Presumed” buyer’s agent shall orally

disclose that fact to the seller/lessor or agent at first contact• I.E., non face-to-face contact

“Presumed” Buyer Agency

Termination• Either

• The buyer, lessee, or licensee expressly states a wish to terminate the presumed buyer agency relationship; or

• The licensee and either the buyer or the lessee enter into a brokerage agreement.

• Before presenting offer or negotiating purchase of property, “presumed” agency must be terminated

Dual Agency

Consent for Dual Agency Form• Can be signed at time of disclosure,

however, if party has previously signed a Consent for Dual Agency form, the party must affirm consent for the sale of a particular property to a particular buyer (the lines provided on the form)

Dual Agency

• Intra-Company Agent• Single agent dual agency prohibited• Must be Salesperson or Assoc. Broker• Intra-company agent provides same

services as exclusive agent, including advising client as to price and negotiation strategy

Dual Agency

• Broker or designee is dual agent – buyer and seller agents are intra-company agents

• Intra-company agents MUST keep confidential information CONFIDENTIAL except to the dual agent

• Can Teams do Dual Agency?

Dual Agency

• A licensee may withdraw from representing a client who refuses to consent to a disclosed dual agency

• Does not limit the agent who terminated dual agency from continuing to represent client in other non-dual agency transactions

Agency Disclosure Form

• Disclosure must occur not later than the first scheduled face-to-face contact with the seller or lessor or the buyer or lessee

• Must be signed by agent or party• Self-Certification

• Open House!

Disclosure Form• Listing/Seller’s Agent → Seller/Client• Buyer’s Agent → Buyer/Client• No Cooperating Agent

• Seller’s Agent → Buyer

• Cooperating Agent → Buyer• Notice: Not to Seller/Agent!

• Buyer’s Agent → Seller or Seller’s Agent• Includes FSBO and Open House

Disclosure Form

• If no face-to-face contact, Buyer’s agent includes form in offer for Seller’s signature, disclosing s/he represents Buyer

Questions?