FACTS: A broker routinely works with members of their own congregation. The broker has deep personal relationships with the members who are from the same culture and/or nationality as the broker.
While working with a married couple interested in purchasing a residential property, the broker mentions the Working with Real Estate Agents Disclosure. The couple informs the broker that due to their personal, trusting relationship, there is no need to review the disclosure or provide them with a written document. Further, when the couple expresses their interest in purchasing a specific property, they inform the broker that there is no need for a written employment agreement. The couple expresses their satisfaction verbally with the broker and indicates that a written employment agreement is not necessary in their culture.
Later, unrelated problems arose in connection with the buyers’ purchase transaction, resulting in a complaint to the Commission. During the investigation, the clients indicated they were satisfied with the representation the broker had provided to them during the transaction and felt that signing documents to evidence the agreement was unnecessary.
ISSUE: Did the broker comply with Rule 58A .0104, Agency Agreements and Disclosures?
ANALYSIS: No. Rule 58A .0104(a) requires every agreement for brokerage services between a broker and a buyer to be express and in writing and signed by the parties not later than the time one of the parties makes an offer to purchase, sell, rent, lease, or exchange real estate to another. In this scenario, the buyer agent did not enter into a written buyer agency agreement prior to the clients making an offer to purchase the property. The broker did not review the Working With Real Estate Agents Disclosure with the couple at first substantial contact as required under Rule 58A .0104(c).
Rule 58A .0104(c) states that in every real estate sales transaction, a broker shall at first substantial contact with a prospective buyer or seller, provide the prospective buyer or seller with a copy of the publication, “Working With Real Estate Agents,” set forth the broker’s name and license number thereon, review the publication with the buyer or seller, and determine whether the agent will act as the agent of the buyer or seller in the transaction.
Even if a broker believes that they are trusted and that the culture or tradition of consumers with whom they are working, does not require disclosures or written agreements, there is no exception within Commission Rules for such circumstances. The basic requirements of agency disclosure apply to all cultures, religions, and nationalities equally.
Further, it is irrelevant that the client did not want to sign any agreements or review documentation. The Commission expects all brokers to adhere to Rule 58A .0104, Agency Agreements and Disclosure.
License Law and Commission Rules 58A .0104,