Legally speaking: Can sellers control who you cooperate with?
On July 29, 2013
By Peg Ritenour, OAR Vice President of Legal Services/Administration
Q: I have just taken a listing that I will be submitting to my local MLS. However, the seller had a bad experience with another broker in a previous transaction and does not want that broker to show his property and does not want me to offer compensation to this broker. Can I do this or would I be violating the Code of Ethics or the MLS rules?
A: As the listing agent, you owe your seller a fiduciary duty of obedience that requires you to follow his lawful instructions. Certainly in this case there is nothing unlawful about the seller’s instruction and therefore you need to comply with his directive.
Of course you do want to be mindful of your duties under the NAR Code of Ethics and the MLS rules. Article 17 of the Code does require REALTORS to “cooperate” with other REALTORS, unless such cooperation is not in the best interests of the client. The fact that the seller (your client) has decided that he does not want this other broker to be involved in the sale of his property would be sufficient to relieve you from your ethical obligation to cooperate with this other broker. Of course for your protection you should have the seller put this instruction in writing.
As to the MLS rules, your local MLS probably adopted a provision from the NAR model rules that addresses how these kinds of situations are handled. This section provides that a listing broker can notify another broker in writing if the compensation that is reflected in the MLS on a listing is not being offered to him. However this written notice must be communicated to that broker before he produces an offer to purchase. Thus it is imperative that this written notice be delivered immediately. In your situation, the notification should also specify that per the seller’s request, cooperation is also not being extended and therefore per the seller’s instructions the brokerage is also not allowed to show the property.