Real Estate Agency Relationships PDF

AGENCY LAW DISCLOSURE Disclosure Regarding Real Estate Agency Relationships Prepared by: Agent...

AGENCY LAW DISCLOSURE Disclosure Regarding Real Estate Agency Relationships Prepared by: Agent Phone Broker Email NOTE: This form is used by agents as an attachment when preparing for client signature any representation/purchase/exchange/ option agreement or counteroffer relating to any marketable interest in real estate, to inform consumers about agency relationships with brokers. [Calif. Civil Code §§2079 et seq.] When negotiating a leasehold for a term exceeding one year, use RPI Form 305-1 or 550-2. DATE: , 20 , at , California. TO THE SELLER AND THE BUYER: ____________________________________________________________________ 1. FACTS: When you enter into a discussion with a real estate agent regarding a real estate transaction, you should from the outset understand what type of agency relationship or representation you wish to have with the agent in the transaction. 2. SELLER AGENT: A Seller Agent under a representation agreement with the Seller acts as the Agent for the Seller only. A Seller Agent or a subagent of that Agent has the following affirmative obligations: 2.1  To the Seller: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in dealings with the Seller. 2.2  To the Buyer and the Seller: a. Diligent exercise of reasonable skill and care in performance of the Agent’s duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the Agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of the parties. 2.3  An Agent is not obligated to reveal to either party any confidential information obtained from the other party which does not involve the affirmative duties set forth above. 3. BUYER AGENT: A Buyer Agent can, with a Buyer’s consent, agree to act as the Agent for the Buyer only. This includes a Buyer agent under a Buyer Representation Agreement with the Buyer. In these situations, the Agent is not the Seller Agent, even if by agreement the Agent may receive compensation for services rendered, either in full or in part, from the Seller. An Agent acting only for a Buyer has the following affirmative obligations: 3.1  To the Buyer: a. A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Buyer. 3.2  To the Buyer and the Seller: a. Diligent exercise of reasonable skill and care in performance of the Agent’s duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the Agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation, of the parties. An Agent is not obligated to reveal to either party any confidential information obtained from the other party that does not involve the affirmative duties set forth above. 4. AGENT REPRESENTING BOTH THE SELLER AND THE BUYER: A Real Estate Agent, either acting directly or through one or more salespersons and broker associates, can legally be the Agent of both the Seller and the Buyer in a transaction, but only with the knowledge and consent of both the Seller and the Buyer. 4.1  In a dual agency situation, the Agent has the following affirmative obligations to both the Seller and the Buyer: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either the Seller or the Buyer. b. Other duties to the Seller and the Buyer as stated above in their respective sections. 4.2  In representing both Seller and Buyer, a dual agent may not, without the express permission of the respective party, disclose to the other party confidential information, including, but not limited to, facts relating to either the Buyer's or Seller's financial position, motivations, bargaining position or other personal information that may impact price, including the Seller's willingness to accept a price less than the listing price or the Buyer's willingness to pay a price greater than the price offered. 5. SELLER AND BUYER RESPONSIBILITIES: Either the purchase agreement or a separate document will contain a confirmation of which agent is representing you and whether that agent is representing you exclusively in the transaction or acting as a dual agent. Please pay attention to that confirmation to make sure it accurately reflects your understanding of your agent's role. 6. The above duties of the Agent in a real estate transaction do not relieve a Seller or a Buyer from the responsibility to protect their own interests. You should carefully read all agreements to assure that they adequately express your understanding of the transaction. A Real Estate Agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. 7. If you are a Buyer, you have the duty to exercise reasonable care to protect yourself, including as to those facts about the property which are known to you or within your diligent attention and observation. 8. Both Sellers and Buyers should strongly consider obtaining tax advice from a competent professional because the federal and state tax consequences of a transaction can be complex and subject to change. 9. Throughout your real property transaction, you may receive more than one disclosure form, depending upon the number of Agents assisting in the transaction. The law requires each Agent with whom you have more than a casual relationship to present you with this disclosure form. You should read its contents each time it is presented to you, considering the relationship between you and the Real Estate Agent in your specific transaction. 10. This disclosure form includes the provisions of §2079.13 to §2079.24, inclusive, of the Calif. Civil Code set forth on the reverse hereof. Read it carefully. _____________________________________________ _____________________________________________ (Buyer Broker) Date (Buyer's Signature) Date _____________________________________________ _____________________________________________ (Signature of Salesperson or Broker-Associate, if any) Date (Buyer's Signature) Date _____________________________________________ _____________________________________________ (Seller Broker) Date (Seller's Signature) Date ___________________________________________ _____________________________________________ (Signature of Salesperson or Broker-Associate, if any) Date (Seller's Signature) Date - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - PAGE 1 OF 2 — FORM 305- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - PAGE 2 OF 2 — FORM 305- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2079.13. As used in Sections 2079.14 to 2079.24, inclusive, the following terms have a. The seller agent, if any, shall provide the disclosure form to the seller prior to the following meanings: entering into the listing/representation agreement. a. “Agent” means a person acting under provisions of Title 9 (commencing with b. The buyer agent shall provide the disclosure form to the buyer as soon as Section 2295) in a real property transaction, and includes a person who is practicable prior to execution of the buyer's offer to purchase. If the offer to licensed as a real estate broker under Chapter 3 (commencing with Section purchase is not prepared by the buyer agent, the buyer agent shall present the 10130) of Part 1 of Division 4 of the Business and Professions Code, and under disclosure form to the buyer not later than the next business day after receiving whose license a listing is executed or an offer to purchase is obtained. the offer to purchase from the buyer. The agent in the real property transaction bears responsibility for that agent's §2079.15. In any circumstance in which the seller or buyer refuses to sign an salespersons or broker associates who perform as agents of the agent. When a acknowledgment of receipt pursuant to Section 2079.14, the agent shall set forth, salesperson or broker associate owes a duty to any principal, or to any buyer or sign, and date a written declaration of the facts of the refusal. seller who is not a principal, in a real property transaction, that duty is equivalent §2079.17. (a) As soon as practicable, the buyer agent shall disclose to the buyer and to the duty owed to that party by the broker for whom the salesperson or broker seller whether the agent is acting in the real property transaction as the buyer agent, associate functions. or as a dual agent representing both the buyer and the seller. This relationship shall b. “Buyer” means a transferee in a real property transaction, and includes a person be confirmed in the contract to purchase and sell real property or in a separate writing who executes an offer to purchase real property from a seller through an agent, executed or acknowledged by the seller, the buyer, and the buyer agent prior to or or who seeks the services of an agent in more than a casual, transitory, or coincident with execution of that contract by the buyer and the seller, respectively. preliminary manner, with the object of entering into a real property transaction. b. As soon as practicable, the seller agent shall disclose to the seller whether the “Buyer” includes vendee or lessee of real property. seller agent is acting in the real property transaction as the seller agent, or as c. “Commercial real property” means all real property in the state, except (1) a dual agent representing both the buyer and seller. This relationship shall be single-family residential real property, (2) dwelling units made subject to confirmed in the contract to purchase and sell real property or in a separate Chapter 2 (commencing with Section 1940) of Title 5, (3) a mobilehome, as writing executed or acknowledged by the seller and the seller agent prior to or defined in Section 798.3, (4) vacant land, or (5) a recreational vehicle, as coincident with the execution of that contract by the seller. defined in Section 799.29. c. The confirmation required by subdivisions (a) and (b) shall be in the following d. “Dual agent” means an agent acting, either directly or through a salesperson or form: broker associate, as agent for both the seller and the buyer in a real property [Do not fill out] is the broker of (check one): transaction. (Name of Seller Agent, Brokerage firm and license number) e. “Listing/representation agreement” means a written contract between a seller the seller; or of real property and an agent, by which the agent has been authorized to sell both the buyer and seller. (dual agent) the real property or to find or obtain a buyer, including rendering other services [Do not fill out] is (check one): for which a real estate license is required to the seller pursuant to the terms of (Name of Seller Agent and license number) the agreement. is the Seller Agent. (salesperson or broker associate) is both the Buyer Agent and Seller Agent. (dual agent) f. “Seller agent” means a person who has obtained a listing of real property to act as an agent for compensation. [Do not fill out] is the broker of (check one): g. “Listing price” is the amount expressed in dollars specified in the listing for (Name of Buyer Agent, Brokerage firm and license number) which the seller is willing to sell the real property through the seller agent. the buyer; or h. “Offering price” is the amount expressed in dollars specified in an offer to both the buyer and seller. (dual agent) purchase for which the buyer is willing to buy the real property. [Do not fill out] is (check one): i. “Offer to purchase” means a written contract executed by a buyer acting through (Name of Buyer Agent and license number) a buyer agent that becomes the contract for the sale of the real property upon the Buyer Agent. (salesperson or broker associate) acceptance by the seller. both the Buyer Agent and Seller Agent. (dual agent) j. “Real property” means any estate specified by subdivision (1) or (2) of Section d. The disclosures and confirmation required by this section shall be in addition 761 in property, and includes (1) single-family residential property, (2) multiunit to the disclosure required by Section 2079.14. An agent's duty to provide disclosure and confirmation of representation in this section may be performed residential property with more than four dwelling units, (3) commercial real by a real estate salesperson or broker associate affiliated with that broker. property, (4) vacant land, (5) a ground lease coupled with improvements, or (6) a manufactured home as defined in Section 18007 of the Health and Safety §2079.19. The payment of compensation or the obligation to pay compensation to an Code, or a mobilehome as defined in Section 18008 of the Health and Safety agent by the seller or buyer is not necessarily determinative of a particular agency Code, when offered for sale or sold through an agent pursuant to the authority relationship between an agent and the seller or buyer. A listing agent and a selling agent may agree to share any compensation or commission paid, or any right to any contained in Section 10131.6 of the Business and Professions Code. compensation or commission for which an obligation arises as the result of a real k. “Real property transaction” means a transaction for the sale of real property in estate transaction, and the terms of any such agreement shall not necessarily be which an agent is retained by a buyer, seller, or both a buyer and seller to act determinative of a particular relationship. in that transaction, and includes a listing or an offer to purchase. §2079.20. Nothing in this article prevents an agent from selecting, as a condition l. “Single-family residential property” or “single-family residential real property” of the agent’s employment, a specific form of agency relationship not specifically means any of the following: (1) Real property improved with one to four prohibited by this article if the requirements of Section 2079.14 and Section 2079.17 dwelling units, including a leasehold exceeding one year’s duration. (2) A unit in are complied with. a residential stock cooperative, condominium, or planned unit development.(3) A mobilehome or manufactured home when offered for sale or sold through a §2079.21. (a) A dual agent may not, without the express permission of the seller, real estate broker pursuant to Section 10131.6 of the Business and Professions disclose to the buyer any confidential information obtained from the seller. Code. b. A dual agent may not, without the express permission of the buyer, disclose to m. “Sell,” “sale,” or “sold” refers to a transaction for the transfer of real property the seller any confidential information obtained from the buyer. from the seller to the buyer and includes exchanges of real property between c. “Confidential information” means facts relating to the client's financial position, the seller and buyer, transactions for the creation of a real property sales motivations, bargaining position, or other personal information that may impact contract within the meaning of Section 2985, and transactions for the creation price, such as the seller is willing to accept a price less than the listing price or of a leasehold exceeding one year's duration. the buyer is willing to pay a price greater than the price offered.' n. “Seller” means the transferor in a real property transaction and includes an d. This section does not alter in any way the duty or responsibility of a dual agent owner who lists real property with an agent, whether or not a transfer results, or to any principal with respect to confidential information other than price. who receives an offer to purchase real property of which he or she is the owner §2079.22. Nothing in this article precludes a seller agent from also being a buyer from an agent on behalf of another. “Seller” includes both a vendor and a lessor agent. If a seller or buyer in a transaction chooses to not be represented by an agent, of real property. that does not, of itself, make that agent a dual agent. o. “Buyer agent” means an agent who represents a buyer in a real property transaction. §2079.23. A contract between the principal and agent may be modified or altered to change the agency relationship at any time before the performance of the act p. “Buyer representation agreement” means a written contract between a buyer of which is the object of the agency with the written consent of the parties to the agency real property and a buyer agent by which the buyer agent has been authorized relationship. by the buyer to provide services set forth in subdivision (a) of Section 10131 of the Business and Professions Code for or on behalf of the buyer for which a §2079.24. Nothing in this article shall be construed to either diminish the duty real estate license is required pursuant to the terms of the contract. of disclosure owed buyers and sellers by agents and their associate licensees, subagents, and employees or to relieve agents and their associate licensees, §2079.14. A seller agent and buyer agent shall provide the seller and buyer subagents, and employees from liability for their conduct in connection with acts in a real property transaction with a copy of the disclosure form specified in governed by this article or for any breach of a fiduciary duty or a duty of disclosure. Section 2079.16, and shall obtain a signed acknowledgment of receipt from that seller and buyer, except as provided in Section 2079.15, as follows: FORM 305 12-24 ©2024 RPI — Realty Publications, Inc., P.O. BOX 5707, RIVERSIDE, CA 92517