Legally speaking: Are agents required to buy, sell or lease their property with their brokerage?
On July 8, 2013
By Peg Ritenour, OAR Vice President of Legal Services/Administration
There is nothing in the license law that requires agents to purchase or sell their own property through the broker with whom they are licensed. However, a broker can require this as a condition of working for the brokerage. If a broker wants to impose this requirement on affiliated agents, it is advised that this be set forth in the independent contractor agreement with the agent and/or in the broker’s policy manual. The broker should also check with his E & O insurance carrier to make sure that there won’t be any issue with coverage.
As to whether the name of the brokerage must be included in advertisements, the answer depends on whether the property is listed with the brokerage. If it is, then the brokerage name must be included. If the property is not listed with the brokerage, then the brokerage name should not be included. In that case, only the agent’s name should appear in the ad.
Regardless of whether the property is listed with the brokerage or not, under the license law any licensee who is marketing his own property must be identified in the advertisement by name and must indicate that the property is owned by the licensee. Examples of proper identification are “Tom Smith, Agent/Owner” or “Mary Jones, Broker/Owner.” This must be done in all forms of marketing, including yard signs, websites, print ads, etc.
Additionally, whenever an agent or broker enters into an agreement to sell or to purchase property for himself, Article Four of the NAR Code of Ethics requires written disclosure of the fact that he is a licensee. Such disclosure must be made prior to entering into a contract. This is typically done in the purchase contract or lease, but it could be included in a separate document, e-mail etc.
And finally, remember…if you are a party to a transaction, you can only represent yourself — you can’t claim to also represent the other party to the transaction or act as a dual agent. More on this next week!