MARYLAND REALTOR® February | March 2013 19
aspect of the law. Consumers need to know to be careful because you represent the interests of the person the consumer may be negotiating with. For example, if the seller’s agent shows the listed property to an unrepresented buyer, as a customer, not as a client, the law requires the seller’s agent to present the Agency Disclosure form to the buyer and ask to have it signed, acknowledging the licensee as the seller’s agent. If the listing agent shows the property to five unrepresented buyers, five distinct forms must be in the file. (Don’t forget to give the consumer a copy of any form he or she signs.) This illustrates why there is no single, specific number of Agency Disclosure forms for every transaction. On the other hand, suppose the buyer views a property, is accompanied by an agent and the seller or listing agent is present to disable the alarm, etc. Under these circumstances, the duty of disclosure falls on the agent accompanying the buyer. Historically (before 1999), the agent taking a buyer to see property was the seller’s agent. After the current law took effect, almost all licensees take buyers to see property as the buyer’s agent. Therefore, it is important to provide the Agency Disclosure form to the seller (or seller’s agent) identifying oneself as the buyer’s agent. If, in the course of representing a buyer, you have 5 scheduled face-toface contacts with 5 different sellers or seller’s agents, you must have 5 Agency Disclosure forms signed, one for each contact. This is another illustration of why there is no uniform rule that applies to every transaction. You may be asking whether there are a minimum number of forms each transaction folder should contain. The answer is yes. Each file must contain the agency disclosure form the client signed when you disclosed to him that you were representing him. A listing agent’s file must contain a copy of any form the agent presented to any unrepresented buyer who viewed the property with the listing agent. The buyer’s agent’s file must contain the form used to disclose to the seller that the agent was the buyer’s agent. This is the bare minimum under the law.
Maryland’s agency disclosure law is not a model of user-friendly legislation. Nevertheless, it can be easily complied with by following a few simple guidelines. Imposing additional, unauthorized requirements, especially on agents from other companies, only makes compliance more difficult. Maryland’s Agency law is not going to change any time soon, so the MAR Legal Department will continue to provide guidance on the best ways to comply, with emphasis on simplicity. Advising members about managing risk has always been our top priority. If you have additional questions, please contact the MAR Legal Department at 800-638-6425 or legal@mdrealtor.org.
Trouble Seems to Find Us
Q.
I represent a seller in a short sale transaction. Where can I find guidance about the lender’s procedure for handling offers that come in after the property is under contract? Also, I’ve heard a real estate licensee who fails to notify the lender of all offers can be investigated for fraud. Is this true?
A.
Let’s assume the seller and lender have agreed that a short sale is the best alternative. You have listed the property and received an offer that the seller accepts. Once the property is under contract, you change the status in the MLS to Under Contract/ Contingent because it’s subject to third party (lender) approval. Because buyers’ agents know it’s a potential short sale, they may advise buyers to pursue the property knowing that contracts are often not approved by the lender. As a consequence, many listing agents receive offers on short sales even after the property is under contract. There are best practices to follow under these circumstances.
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