In Huijers v. Demarrais, the California Court of Appeals addressed the issue of disclosure by real estate
licensees in dual agency situations.
Not exact matches
The draft proposal from the Office of the Superintendent of Real Estate prohibits the practice of
dual agency, except
in «remote locations that are under - served by
licensees.»
(2) The designation of one or more
licensees as a designated agent does not constitute
dual agency under this section unless the
licensee designated as the designated agent represents the parties referred to
in paragraph (a), (b), (c) or (d) of the definition of «
dual agency» as clients
in respect of a trade
in real estate.
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.
Specifically, the Commission determined that the
licensees had failed to provide a property condition disclosure statement, failed to obtain a properly executed
dual agency form, and also had a role
in the «irregularities»
in the purchase contract and downpayment assistance provided.
Even if one of those other
licensees has long before established an
agency relationship with a buyer, if that buyer becomes interested
in any of the brokerage's listings, both the seller and the buyer must first agree for their respective
licensees and the brokerage to act as
dual agents before the seller and buyer can begin negotiating the transaction while using the assistance of those two
licensees.
The ATF considered designated
agency to be a positive alternative to
in - house
dual agency when there is a
licensee acting as sole agent for the seller, another
licensee engaged by the same brokerage who is acting as sole agent for a buyer, and the buyer becomes interested
in the property offered for sale by the seller.
The brokerage would not start out, as it does today, as the sole agent for one of the parties, with every
licensee engaged by the brokerage taking on the same status, and then have to strip away many of its
agency obligations (and simultaneously stop being able to provide the
agency services it initially offered) to become an impartial
dual agent
in an «
in - house» transaction.
While transaction brokerage addresses some of the conflicts of interest associated with
dual agency, it reduces the range of services that
licensees can provide and results
in lesser consumer protections for all parties to a transaction,» says OSRE.
The draft proposal from the Office of the Superintendent of Real Estate prohibits the practice of
dual agency, except
in «remote locations that are under - served by
licensees.»
Also called, among other things «appointed
agency,» this is a brokerage practice that allows the managing broker to designate which
licensees in the brokerage will act as agents of the seller, and which will act as agents of the buyer, without the individual
licensees being
dual agents.
The court agreed that the
licensees failure to obtain
dual agency consents for both transactions and also not including the necessary language
in the purchase agreement constituted incompetency.
New rules forbidding
dual agency (where a real estate
licensee represents two parties
in a sale) originate from recommendations
in a 2016 report of the Independent Advisory Group on Real Estate Regulation
in B.C.
In the context of real estate, the obligation to maintain confidentiality of client information applies in any agency relationship a licensee may have with the client; i.e. buyer agency, seller agency, brokerage agency, designated agency, or limited dual agenc
In the context of real estate, the obligation to maintain confidentiality of client information applies
in any agency relationship a licensee may have with the client; i.e. buyer agency, seller agency, brokerage agency, designated agency, or limited dual agenc
in any
agency relationship a
licensee may have with the client; i.e. buyer
agency, seller
agency, brokerage
agency, designated
agency, or limited
dual agency.
Therefore, limited
dual agency in designated
agency occurs only when the same
licensee or
licensees have been designated as the designated agent to represent two different clients who have conflicting interests; e.g. who become interested
in negotiating with respect to the same real estate.
An important distinction between limited
dual agency that arises
in brokerage
agency as compared to limited
dual agency that arises
in designated
agency is that under brokerage
agency dual agency occurs
in «
in - house» transactions involving more than one
licensee.
The Superintendent has provided a narrow exemption to the rule prohibiting
dual agency, for rare situations where the trade occurs
in remote locations that are under - served by
licensees and where an alternative to
dual agency would be impracticable.
Then the
licensee will be
in an undisclosed
dual agency situation, and
dual agency is prohibited.
Dual agency is when a
licensee represents two or more parties with competing interests
in a trade
in real estate, such as both buyer and seller, or two or more competing buyers.
In brokerage
agency, limited
dual agency can occur when the same
licensee engaged by the brokerage represents the buyer and seller, or where different
licensees engaged by the same brokerage represent the buyer and the seller.
5 - 17 (1) Despite section 5 - 16, a brokerage may engage
in dual agency in respect of a trade
in real estate if the real estate is
in a remote location that is under - served by
licensees and where it is impracticable for the parties to be provided trading services by different
licensees.
Dual agency refers to when a
licensee represents,
in a single transaction, two or more clients whose interests are
in conflict.
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
In such circumstances, so long as an
agency relationship has not been created with the other party, the
licensee and their related brokerage may wish to treat the other party as a customer instead of entering into a limited
dual agency relationship.
This is important because one of the most significant challenges for a
licensee in limited
dual agency, where there are two clients, is the conflict between the obligation to disclose to each client all known material information respecting the real estate services, the real estate itself, and the trade
in real estate [subsection 3 - 3 (f) of the Rules], and the obligation to maintain the confidentiality of information respecting each client [subsection 3 - 3 (e) of the Rules].
Licensees should also be aware that when acting as a limited dual agent in a transaction where the parties to a contract have entered into a limited dual agency agreement, that agreement specifically modifies the duty of confidentiality and provides that licensees have a duty to disclose information to both parties in a transaction, subject to three exceptions as
Licensees should also be aware that when acting as a limited
dual agent
in a transaction where the parties to a contract have entered into a limited
dual agency agreement, that agreement specifically modifies the duty of confidentiality and provides that
licensees have a duty to disclose information to both parties in a transaction, subject to three exceptions as
licensees have a duty to disclose information to both parties
in a transaction, subject to three exceptions as follows:
In order to act as a limited dual agent, a licensee (whether the brokerage in brokerage agency or the designated agent in designated agency) must have the agreement of the two clients as to how the duties owed to those clients are to be modified or made inapplicabl
In order to act as a limited
dual agent, a
licensee (whether the brokerage
in brokerage agency or the designated agent in designated agency) must have the agreement of the two clients as to how the duties owed to those clients are to be modified or made inapplicabl
in brokerage
agency or the designated agent
in designated agency) must have the agreement of the two clients as to how the duties owed to those clients are to be modified or made inapplicabl
in designated
agency) must have the agreement of the two clients as to how the duties owed to those clients are to be modified or made inapplicable.