Which Law Does an Agent Have a Duty to Comply with for Consumers

There are two ways to look at this fiduciary duty – from the perspective of the seller and the buyer. A universal agent can serve the client in any capacity. An agent with a power of attorney would have such a capacity, but this is rare in real estate. Today, we continue our series on the fiduciary duties of real estate professionals. Lawyer Carl Block continues his examination of dual representation in real estate transactions. Dual agency is authorized by law, but involves risks for the agent. Some of them may be known and many may not be known, but the agent should be aware of this when managing their fiduciary duties to their clients. The ASPR was introduced to provide consumers with more complete and up-to-date information on the nature and costs of the home purchase or payment process and to protect consumers from unnecessarily high billing fees caused by certain practices considered abusive. The RESPA and Regulation X prohibit, among other things, the payment or receipt of “fees, bribes or valuables” (i.e.

intermediate fees) in exchange for the intermediation of settlement services. Settlement services activities include, but are not limited to, lending services such as accepting applications, obtaining proof of income, and communicating with a borrower or lender. The RESPA and Regulation X allow reasonable payments to affiliates and third parties for services actually provided in the issuance, processing or financing of a loan. Before drafting a purchase agreement, home buyers usually sign a contract with their agent known as “buyer representation agreements.” The three most common types of buyer representation agreements are: non-exclusive/non-indemnified agreement, non-exclusive/representational representation agreement, and exclusive right to represent the agreement. Non-exclusive agreements usually last a few months, while exclusive contracts sometimes last up to a year. The application of this obligation can be interpreted in different ways. For example, it may prevent you from accepting a job from a person or agency whose interests are in direct competition with your original client. Another example would be if you bought and resold a property in which your client has expressed an interest.

The agency that establishes a legally binding relationship between the real estate agent and his client during the buying and selling process is one of the most important aspects of the real estate profession. Thanks to the agency, real estate agents act in the best interest of their clients. Agents may have one or two agencies, but their status must always be disclosed. Under Pennsylvania law, a real estate licensee may have the following business relationships (agency) with a client: The following cases all deal with agency issues in one way or another, often a breach of the buyer`s fiduciary duty and/or representation. The Graham-Leach-Bliley Act and its implementing provisions (collectively, “GLBA”) are other federal laws with which Berkshire Hathaway HomeServices The Preferred Realty has taken steps to comply. The GLBA prohibits Berkshire Hathaway HomeServices The Preferred Realty from sharing non-public personal information about its customers with third parties unless Berkshire Hathaway HomeServices The Preferred Realty provides certain communications to its customers or Berkshire Hathaway HomeServices The Preferred Realty discloses such non-public personal information under an applicable exemption under the GLBA. Please read the Berkshire Hathaway HomeServices The Preferred Realty Privacy Statement for a description of our policies regarding the use and/or privacy of this information. I confirm that I have received this disclosure.

The broker must also disclose to the principal any information relevant to the potential transaction, such as any offer received or the estimated market value of the property by the broker. In some States, the confidentiality owed by the agent to the principal ends with the termination of the agency relationship. A buyer`s agent may receive a fee, which may include a percentage of the purchase price, and even if paid by the seller/landlord, they represent the interests of the buyer/tenant. The relationship between the client and the agency varies depending on the agreement regarding the extent of representation of the client by the agent or to whom the agent is represented or how many are represented. You may be liable for any damage caused to your client`s client as a result of negligence or irresponsible actions. For example, if a seller is not informed of a higher bid for their home, you will have to pay the difference between the two listings. The following is negotiable and will be addressed in an agreement or statement with the licensee: In any real estate transaction involving real estate agents, the broker owes his duty to the person who hires him – the client. Traditionally, it was the seller, although many buyers now hire their own agents to represent them. The agent`s primary fiduciary duty is to represent the client, but must deal fairly and honestly with the client. Although both the buyer and seller may have agents, the seller`s agent usually has more duties because it is the seller who has the property for sale and must be honest about the property.

A general agent represents the client in a particular company. For example, employees are the employer`s general representative. A property manager is usually a general agent of the owner and real estate agents are general agents of the brokerage firm they represent. A broker may also designate one of its agents as the designated agent for a particular client. Sometimes, for an internal sale, a broker may appoint an agent for the seller and another agent for the buyer of the same property. In the designated agency, the employer broker may, with your consent, appoint one or more licence holders of the real estate company to represent you. Other persons in the company may represent another party and do not receive confidential information. The appointed agent(s) has(have) the obligations listed above under Seller`s Agency and Buyer`s Agency. Common and legal laws govern relationships within an agency. An agent is a person who represents the principal or client in a transaction, who has a fiduciary responsibility to the principal and who acts on behalf of the principal. The agent`s fiduciary duty to the client is to represent the client to the fullest extent possible within the limits of the law.

A client is the other party to the transaction who is not represented by the agent. While the agent has no fiduciary duty to a client, the seller`s agent must still disclose important information about the property and be honest with the client. A client can and will often have their own agent. For example, in a real estate transaction where the buyer and seller are represented by agents, the buyer is a customer of the seller and the seller is a customer of the buyer. The seller`s agent has no fiduciary duty to the buyer and the buyer`s agent has no fiduciary duty to the seller. When signing a written agreement or disclosure statement, a transaction licensee has an additional duty of limited confidentiality, as the following information cannot be disclosed: Berkshire Hathaway HomeServices The Preferred Realty has invested time and effort in developing and reviewing compliance programs, consistent with its commitment to comply with federal laws. applicable state and local. However, Berkshire Hathaway HomeServices The Preferred Realty cannot provide you with legal advice and you should not rely on us to do so. Berkshire Hathaway HomeServices The Preferred Realty makes no representations or warranties, express or implied, regarding compliance with applicable federal, state and local laws, and Berkshire Hathaway HomeServices The Preferred Realty disclaims and disclaims all such representations and warranties, including, but not limited to, the implied warranties of merchantability and fitness for a particular purpose, in each case, to the fullest extent not prohibited by applicable law. A licensee may have the following business relationships with the consumer: In the designated agency, the employer broker is a double agent and has the following additional duties: Applicable laws and regulations do not specify most of the terms of real estate agency contracts. These terms and conditions (including the broker`s commission, the scope of activities and practices, the broker`s cooperation with other brokers, including the allocation of fees and the duration of the contract) are determined by negotiations between the parties.

I confirm that I provided this document to the consumer mentioned above during the first interview. To perform the functions of a real estate agency, agents may appoint their own agents – sub-agents – who also have a fiduciary duty to the client. Often, sub-agents are other brokers who find buyers for a home listed in the Multiple Listing Service (MLS). However, due to liability, sub-agency between different brokers is becoming increasingly rare. “Opponents of dual representation do not believe that an agent can represent both the seller and the buyer without compromising the interests of one or both parties.