When only representing the seller, the licensee needs to be careful to avoid creating an undisclosed
dual agency relationship with the buyer and care should be taken in both words and conduct to ensure that buyers understand that the sales associate doesn't represent them.
If she
does enter into a disclosed
dual agency relationship, Rita must observe her state's
dual agency laws, which probably require her to keep some types of information from each party confidential.
79
DOS 99 Matter of
DOS v. Pagano - disclosure of
agency relationships; failure to appear at hearing; proper business practices; unauthorized practice of law; unearned commissions; vicarious liability; fraudulent practice; jurisdiction; ex parte hearing may proceed upon proof of proper service;
DOS has jurisdiction after expiration of respondents» licenses as acts of misconduct occurred and the proceedings were commenced while the respondents were licensed; licensee fails to timely provide seller client with
agency disclosure form prior to entering into listing agreement and fails to timely provide
agency disclosure form to buyer upon first substantive contact; broker fails to make it clear for which party he is acting; broker violates 19 NYCRR 175.24 by using exclusive right to sell listing agreement without mandatory definitions of «exclusive right to sell» and «exclusive
agency»; broker breaches fiduciary duties to seller clients by misleading them as to buyer's ability to financially consummate the transaction; broker breaches his fiduciary duty to seller by referring seller to the attorney who represented the buyers when he knew or should have known such attorney could not properly protect seller's interests; improper for broker to use listing agreements providing for broker to retain one half of any deposit if forfeited by buyer as such forfeiture clause could, by its terms, allow broker to retain part of the deposit when broker
did not earn a commission; broker must conduct business under name as it appears on license; broker engaged in the unauthorized practice of law in preparing contracts for purchase and sale of real estate which
did not contain a clause making it subject to the approval of the parties» attorneys and were not a form recommended by a joint bar / real estate board committee; broker demonstrated untrustworthiness and incompetency in using sales contract which purported to change the terms of the listing agreement to include a higher commission; broker demonstrated untrustworthiness and incompetency in using contracts of sale which were unclear, ambiguous, vague and incomplete; broker failed to amend purchase agreement to reflect amendment to increase deposit amount; broker demonstrated untrustworthiness in back - dating purchase agreements; broker demonstrated untrustworthiness in participating in scheme to have seller hold undisclosed second mortgage and to mislead first mortgagee about the purchaser's financial ability to purchase; broker demonstrated untrustworthiness by claiming unearned commission and filing affidavit of entitlement for unearned commission;
DOS fails to establish by substantial evidence that respondent acted as undisclosed
dual agent; corporate broker bound by the knowledge acquired by and is responsible for acts committed by its licensees within the actual or apparent scope of their authority; corporate and individual brokers» licenses revoked, no action taken on application for renewal until proof of payment of sum of $ 2,000.00 plus interests for deposits unlawfully retained
Thus, the court affirmed the trial court's ruling that there was no
dual agency relationship between the parties and thus the Brokerage
did not have a heightened disclosure duty that it owed to the Buyers.