Legally speaking: What does Ohio law require when a licensee becomes a buyer (or seller) in a transaction?

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

Exercise caution when communicating via email in real estate transactions

In today’s busy market it is more important than ever to communicate offers and counteroffers quickly. As a result, many agents commonly  communicate their client’s counter offers and acceptances verbally. However, as every licensed agent should know, such verbal negotiations don’t meet the requirement under Ohio law for an enforceable real estate purchase contract.

But what about negotiations that take place via emails? Could an email from a listing agent to the buyer’s agent indicating that the seller has accepted the buyer’s offer be considered sufficient to create a legally binding purchase contract? What if the listing agent forwards an email from the seller indicating his acceptance of the offer to the buyer’s agent? In this article (originally written in 2011, but still timely today), Cleveland-based real estate attorney Cindy Lammert discusses this issue...


By Cindy Lammert, Coakley & Lammert Co., LPA

Real estate professionals who themselves indicate a client’s offer or acceptance via email, or who forward a communication from their client evidencing terms of an offer or acceptance may unwittingly bind their client to a real estate purchase or lease agreement. While it is still the conventional practice to have an original document executed by the parties, courts nationwide are now considering electronic agreements to have the same legal effect.

Recently, a New York appellate division court unanimously held that electronically transmitted emails satisfy New York’s statutes of frauds requirement for real estate contracts to be reduced to writing. In Naldi v. Grunberg, 2010 NY Slip Opp. 07079, the court concluded that the term “writing” as used in the state’s statute of frauds encompasses electronic communications and electronic signatures. “As much as communication original written or typed on paper, an e-mail retrievable from computer storage” is evidence of agreement, the court held.

In Naldi, the purchaser agreed via e-mail to pay $50M for two Manhattan apartment buildings, exercising a first right of refusal for the property that had been conveyed to him in an e-mail by the owner’s agent. When the seller refused to honor the terms set forth by his agent in the e-mail, the purchaser sued the owner for breach of contract. The owner moved to dismiss the lawsuit, arguing that the right of refusal was memorialized only in an email, and hence was not compliant with the statute of frauds. The Appellate Court rejected this argument. Naldi v. Grunberg was appealed in February 2011 to New York’s highest court.

Other courts likewise seem to be inclined to honor e-mail communications as binding. In Shattuck v. Klotzbach (Mass. Super. 2001), 14 Mass.L.Rptr. 360, a Massachusetts court held that “the typed name at the end of an e-mail is more indicative of a party’s intent to authenticate than that of a telegram as the sender of an e-mail types and sends the message on his own accord and types his own name as he so chooses.”

While there are few Ohio court cases relating to whether an email suffices as a signature for purposes of statute of frauds in real estate transaction, at least one Ohio court has suggested that typewritten signatures, including those in a telegram, are adequate. See Hart v. Oak Park Associates (Sept. 14, 1984), 6th Dist. No. L-84-031. Recently, in Bergey v. HSBC Bank USA, 9th Dist. No. 24986, 2010-Ohio-2736, the court also noted that a seller of real property accepted offer of buyer via email correspondence from seller’s agent. Thus, it is becoming more likely that an email from a party or its agent will be deemed sufficient to satisfy the signature requirement in Ohio.

Ohio’s statute of frauds, R.C. 1335.05, states:

No action shall be brought whereby to charge the defendant (…) upon a contract or sale of lands, tenements, or hereditaments, or interest in or concerning them, or upon an agreement that is not to be performed within one year from the making thereof; unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged therewith or some other person thereunto by him or her lawfully authorized. (Emphasis added.)

While the statute does not specify the type or form of writing necessary to constitute a valid agreement, the substantive requirements are defined by common law. “A signed memorandum is sufficient to satisfy the Statute of Frauds so long as it (1) identifies the subject matter of the agreement; (2) establishes that a contract has been made; and (3) states the essential terms with reasonable certainty.” Landskroner v. Landskroner (2003), 154 Ohio App.3d 471, 483.

However, “where there is clear evidence demonstrating that the parties did not intend to be bound by the terms of an agreement until formalized in a written document and signed by both,” then a prior acceptance will not suffice to bind a party until memorialized in an actual document. See Artisan Mech., Inc. v. Beiser, 2010 Ohio 5427, 33, citing Richard A. Berjian, D.O., Inc. v. Ohio Bell Tel. Co. (1978), 54 Ohio St.2d 147, 151-152.

Accordingly, real estate brokers and agents should include a standard disclaimer in all e-mail communications clearly stating that the content may not be deemed an offer, counteroffer or acceptance until paper documents are mutually executed between the parties. This is the case for any email communications relaying an offer, counter-offer, terms of a purchase or lease, or any other communications where it is arguable that the communication forms the basis of the terms of an offer or counteroffer or acceptance of the same.

Real estate brokers and agents likewise should refrain from forwarding their client’s communications to the other party or the other party’s agent, as these likewise may be deemed binding and valid if the client expresses willingness to accept certain terms.

Adhering to the foregoing practices will help a brokerage and its clients to avoid leverage by the opposing party in negotiations, and potential litigation over whether or not a binding agreement was made via an email exchange.

Cindy Lammert will be part of a panel of attorneys discussing “Best Practices for Avoiding Legal Bear Traps” at the OAR Annual Convention & Expo, Sept. 9-10, in Cleveland. The session, scheduled for Sept. 10 from 10 to 11:30 a.m., includes 1.5 hours of continuing education credit. Click here for more information or to register for the event.

Tags: legal

Ohio marketplace experiences an uptick in home purchase agreements reached in June

By Carl Horst, OAR Director of Publications/Media Relations

The Ohio Association of REALTORS reports the number of single-family homes and condominiums put under agreement in June rose from the level posted a month earlier, as well as compared to the same period a year ago.

Ohio’s June Pending Home Sales Index of 150.9, a forward-looking indicator based on contract signings, increased 7.1 percent from June of last year (140.9). Activity in June rose 2.1 percent from the May level (147.8), the fifth consecutive month-over-month gain in contract signings.

Homes put under contract in the second quarter posted gains compared to the same period a year ago, as well as from the results of the first three months of 2014. The second quarter Index of 143.8 is the best quarterly result in the six years that OAR has been collecting pending sales data. The current period posted a 21.6 percent gain from the first quarter Index of 118.3 and a 2.7 percent improvement from second quarter 2013’s mark of 140.1.

“The increase in the number of homes put into contract in June is another important step forward in Ohio’s ongoing effort to establish a solid, stable housing marketplace,” said OAR President Chris Hall. “It’s becoming evident, with each passing month, that buyers are gaining confidence in the market and an appreciation that home ownership is a wise long-term investment.”

Compared to 2008, a historically healthy market that marked the end of five consecutive record years for existing home sales and the onset of the recession, June’s Index score of 150.9 marks a 50.9 increase.

A pending sale or a sale “under agreement” is when the buyer and seller agree on terms of the sale of a home and have a signed purchase and sale agreement, but have yet to close and be recorded as such. Refer to the following report to view the pending home sales index and methods.

OAR, the largest professional trade association in the state with more than 27,000 members, is the only organization that compiles this state wide information from selected Multiple Listing Services each month. The tracking of “pending sales” provides reliable information about where the market is heading in coming months.

Tags: pending home sales, research

Coaching Corner: Why are you in this business?

By Marilou Butcher Roth

Think back, if you will, to when you first became aware that real estate might be a career choice for you. The reasons are vast, and a common thread that always seems to run through choosing real estate as a career is the desire to be of service.

Don’t get me wrong, I have encountered agents who are very clear they are only in it for the money and I can assure you those agents tend to either be out of the business pretty quickly, or if they maintain some longevity, they may be feeling as if there is something missing in their lives.

What an honor to participate with clients in this adventure. Buying and selling homes is an emotional experience, sometimes bringing feelings up that catch you by surprise. Having an agent equipped to facilitate the transaction in an easeful way cannot be underestimated. Are you that agent? Do you keep a clear head in the face of problems?

One of my new agents spoke words that have remained with me for several years. He said, “I view myself as an extension of my clients.” We are here in this business to be just that, an extension of our clients and their desires. We bring many skills to our clients, one of the most important being to keep our client’s needs and desires at the forefront of our minds and directors of our actions.

This message is short and simple — are you staying connected to your deeper purpose? Are you treating your clients and other agents in a way that you would want to be treated? Do you put your head on your pillow at night feeling good about what you have done during the day? Most of you will answer yes. If not, you can easily shift yourself into living a more purposeful life including how you look at your real estate career.

If you find that you are having some difficulty with this process, you may consider doing some journaling first thing in the morning. This practice is highly effective for creating clarity and calmness. Let yourself write whatever comes to mind, no matter how silly it seems. Clear the cobwebs out and you will be delighted at the thoughts that remain. From this point you clan being to pose more pointed questions to yourself when you write, such as “how can I stay connected to my greater purpose or vision?”

And, as always, enjoy!


Marilou Butcher Roth is the owner of The MBR Group, a coaching and training company working primarily with REALTORS who have a desire to work and live from a more inspired place. She is also the Broker/Owner of Group REALTORS in Cincinnati. Marilou is a member of the OAR Executive Committee and immediate past chairman of the organization’s Communications Committee. Feel free to contact Marilou to see if coaching is right for you:

Tags: Coaching Corner, training

Ohio Market Watch: Inventory of homes for sale remains tight

By Greg Stitz, OAR Director of Research

The Ohio Association of REALTORS’ latest Housing Market Confidence Survey reveals a reported increase in the number of homes on the market by one-third (36 percent) of respondents. Survey participants were asked to indicate any noticeable change with regard to the number of homes on the market in their area. 46 percent noticed a slight or significant decrease in the number of homes, one-third (36 percent) noticed a slight or significant increase and 18 percent noticed no change at all.

Survey results are based on responses to a monthly survey, designed to capture the effects of the existing economic conditions and trends on the real estate industry, sent to a pool of 1,500 OAR participants. Click here to participate in future OAR Housing Confidence Surveys.

Tags: Ohio Market Watch, research

View More Articles »