Relationships and Responsibilities

Question 1

Let’s talk about agency disclosure first. Not because it’s more important than the disclosure of material facts, but because it is normally required first.

What Exactly Is Agency Disclosure?
Agency disclosure happens when a licensee makes known possible or existing agency relationships/interests.

If a prospect is unrepresented, an agent should educate them about the possible agency relationships that can be entered into.

If an agent represents a seller, prospective buyers deserve to know this from the start.

If an agent represents a buyer, they have the obligation to disclose that relationship to any sellers they meet.

An agent holding a clipboard talks to two people.

First Substantive Contact
First substantive contact is a trigger for agency disclosure. This is the critical point at which agency disclosure is required. It generally occurs at the first face-to-face meeting with the customer and prior to:

Sharing of confidential information

Any discussion or action regarding a specific property

Informed Consent
Informed consent refers to the principle that clients and customers must understand and be aware of certain actions or agency relationships prior to implementation.

From our earlier discussions on contract law, you might recall that reality of consent — a legal kindred spirit to informed consent — is one of the elements of a valid contract. The idea is that you simply cannot consent to something if you do not have all the facts at hand.

Before an individual agrees to an agency relationship, they need to understand what it is they are getting into. And if they are not entering into an agency relationship with a licensee, they still deserve to know of any existing agency relationships.

Answer 1

Agency Disclosure: The Concept