Ohio’s ‘Consumer Guide to Agency Relationships’ Q&A
On October 22, 2013
By Lorie Garland, Assistant Vice President of Legal Services
As previously reported, effective Sept. 29, 2013, the license law section requiring the Consumer Guide to Agency Relationships (Consumer Guide) was amended. This change was to the types of transactions that require a licensee to provide the Consumer Guide. The Consumer Guide is now no longer required in commercial real estate transactions. Although there was no change to the provisions dictating the contents of the Consumer Guide or the timing of when a licensee must provide the Consumer Guide to a consumer, several questions have been raised about these requirements. Below are some frequently asked questions addressing the Consumer Guide requirements.
Q: What type of transactions require use of the Consumer Guide?
Effective Sept. 29, the Consumer Guide is now only required in the following transactions:
- The sale or lease of vacant land;
- The sale of a parcel of real estate containing one to four residential units;
- The lease of a residential premise if the rental or lease agreement is for a term of more than eighteen months.
Q: Is the Consumer Guide required in the sale of vacant land that is zoned commercial?
Yes. The Consumer Guide is required in the sale of vacant land regardless of zoning.
Q: Is the Consumer Guide required in the sale of a commercial building that contains one residential unit?
Yes. The sale of a property that contains one to four residential units requires use of the Consumer Guide.
Q: Is the Consumer Guide required to be provided to the owner of a property when a property management agreement is entered into?
The only management agreement that would require use of the Consumer Guide at the time of entering into the management agreement is one that includes leasing a residential unit where the term of the lease is or could be more than 18 months. The Consumer Guide would not be required if a management agreement included leasing of only commercial space or residential units where the leases would be 18 months or less.
Q: In a transaction that requires use of the Consumer Guide, when is the Consumer Guide required to be provided to the seller?
A listing agent must provide the seller with the Consumer Guide prior to marketing or showing the seller’s property.
Q: If a licensee is working directly with a buyer, when must the buyer be provided with the Consumer Guide?
The licensee must provide the Consumer Guide to the buyer at the earliest of the following actions of the licensee:
- Prequalification of the buyer;
- Requesting specific financial information from the buyer;
- Showing the buyer properties other than at an open house;
- Discussing with the buyer the making of an offer to purchase;
- Submitting an offer to purchase on behalf of the buyer.
Q: What if the earliest event with the buyer (i.e., prequalification or obtaining specific financial information) occurs over the phone?
The licensee must, over the phone, disclose the agency relationship the licensee has with the buyer and potential seller. The licensee must provide the Consumer Guide to the buyer at the first meeting with the buyer.
Q: What if a licensee provides the Consumer Guide as required by the law but the buyer or seller refuses to sign the Consumer Guide?
A licensee is required to obtain a seller’s or buyer’s signature acknowledging receipt of the Consumer Guide unless the seller or buyer refuses to sign. In this case, the licensee must note on the Consumer Guide who the Consumer Guide was provided to, the date provided and the fact that the individual refused to sign.
Tags: Commercial, legal