Legally speaking: What does Ohio law require when a licensee becomes a buyer (or seller) in a transaction?
On July 28, 2014
By Peg Ritenour, OAR Vice President of Legal Services/Administration
The OAR Legal Assistance Hotline receives an array of real estate-related legal questions — including license law issues, disclosure, contract law, ethics and commission problems, among others. In an effort to help you work within the law, our “Legally Speaking” series spotlights some of the timely questions that are being asked by REALTORS. The following are a sampling of questions about how the agency laws apply when a licensee is party to a transaction, whether as a buyer or seller…
I have my personal residence listed for sale. I also have been representing a buyer that is now interested in my home. Can I be a dual agent, representing myself and the buyer?
A: No. The Ohio license law was amended in 2012 to clarify that a licensee cannot act as a dual agent if the licensee is also a party to the transaction.
Does this mean I can’t list my own property?
A: You can definitely list your own property for sale! You just can’t claim to also represent the buyer’s best interests as a buyer’s agent.
Does that mean that I have to refer the buyer to another agent?
A: Not necessarily. While you can’t represent the buyer in the transaction, you can certainly work with that buyer as a customer. However, if the buyer wants representation in the transaction you will need to refer them to another licensee, as you aren’t able to provide such representation.
Could I refer the buyer to another licensee in my brokerage?
A: Yes, although the buyer certainly cannot be required to accept that referral.
I have a property listed that I am now interested in purchasing. Can I be a dual agent in this situation?
A: No. As stated above, Ohio license law prohibits a licensee from being a dual agent in a transaction to which they are a party. This means that if you want to purchase property that you have listed, you cannot continue to represent the seller.
Does that mean the brokerage has to cancel the listing?
A: Not necessarily. Even though you cannot continue to represent the seller, another licensee in the brokerage may be appointed to take over the listing. Ohio law requires that the seller consent to such an appointment. Ohio law also allows the seller to delegate such authority to make an appointment to the listing licensee. Therefore, you should check your listing contract for language addressing the right to appoint another agent to represent the seller. Even if the seller has delegated the authority to appoint another licensee, the seller must be notified that this has occurred and still has the right to object to the appointment.
Tags: legal, Legally Speaking