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Legally speaking: Are you interfering with another agent’s relationship

By Peg Ritenour, OAR Vice President of Legal Services/Administration

The OAR Legal Assistance Hotline receives an array of real estate-related legal issues — including license law issues, disclosure, contract law, ethics and commission problems, among others. In an effort to help you work “within the law,” we’ve launched a new “Legally Speaking…” feature on the OAR Daily Buzz that will spotlight some of the timely questions that are being asked by REALTORS. This one involves the legality of interfering with another agent’s relationship…

Dilemma of the Week: A buyer attends my open house and tells me he wants to write an offer immediately before he loses this house to someone else. In the conversation, the buyer mentions that he has seen several properties with another agent. Can I write the offer or would I be interfering with this other agent’s relationship with the buyer? I want to be fair, but I also want to sell this property for my seller!

As the market heats up and inventory remains low, it is becoming more common for buyers to want to make offers quickly. And sometimes they put agents in sticky situations like this. Luckily this is an issue that is addressed by both the license law and the REALTOR Code of Ethics.

Ohio Revised Code Section 4735.18(A)(19) provides that a licensee cannot negotiate directly with a seller or buyer who they know is subject to a written exclusive agency agreement with another licensee. Administrative Code Section 1301:5-6-09 further provides that a licensee is not required to ask every buyer if he is working with another agent unless there is reasonable cause to believe the buyer may be represented by another licensee. In that case, a licensee is required to inquire as to the nature of the relationship.

Therefore in this scenario because you know the buyer is working with another agent you do have a duty to ask if it is an exclusive relationship before you write an offer for the buyer. If the buyer is subject to such an agreement then you are prohibited from writing the offer for the buyer. If the buyer has not entered into such an agreement with the other agent then you are free to write the offer.

NAR’s Code of Ethics creates a higher ethical standard for REALTORS. To avoid interfering with the agency relationship another REALTOR may have with a buyer, Standard of Practice 16-13 provides that REALTORS must ask prospects if they are a party to an exclusive representation agreement before providing any substantive services. This includes writing an offer. Thus, under the NAR Code of Ethics, even if the buyer doesn’t mention that they have seen properties with another agent you must still ask the buyer if he is subject to an exclusive agency agreement before writing an offer. If such a relationship exists then all dealings must be conducted through the buyer’s agent.

Tags: legal