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The home builder will be out of town for a significant amount of time in the next few months. The homebuilder wants to give a power of attorney to the listing broker to negotiate and enter into contracts for the sale of homes. The listing broker is willing to act pursuant to this power of attorney, but wants protection from liability for any construction defects in the homes. Can the broker sell homes under a power of attorney from the homebuilder?

ANSWER:

Yes. Although the listing broker can act under a power of attorney from the homebuilder, the listing broker should retain legal counsel to review the terms and conditions of any such power of attorney. Furthermore, the power of attorney should have an indemnification agreement to protect the listing broker from liability for construction defects or other problems with the homes. 

Can a co-listing agent, who is a part owner and managing member of the selling entity (which owns the subdivision), also represent a prospective buyer of a property in the subdivision as a dual agent?

ANSWER:

No. Dual agency imposes restrictions on the conduct of the licensee. Among others, a dual agent may not advocate or negotiate on behalf of either the seller or the buyer. In addition, a dual agent may not disclose confidential information, such as the price the buyer is willing to pay to the other party without the informed consent of that party. Ordinarily, this is not a problem, and a dual agency is in fact specifically authorized by Arizona law. See A.A.C. R4-28-1101(F). However, when a listing agent has an ownership interest in the property being conveyed, it would present a conflict for that agent to also represent the buyer. For this reason, an “owner/agent” cannot also represent the buyer as a dual agent in a transaction.

Quick Quiz

Fill in the Blank:
For this , an “owner/agent” cannot also represent the buyer as a dual agent in a

The purchase contract provides that the buyer has ten days after the physical inspection to notify the seller in writing of any defects. The buyer notified the listing broker of the defects, but could not locate the seller. Does notice to the listing broker constitute notice to the seller?

ANSWER:

Yes. Under Arizona law, notice to an agent generally constitutes notice to a principle. In Re Milliman’s Estate, 101 Ariz. 54, 415 P.2d 877 (1966). On these facts, since the listing broker was notified in writing of the defects, this notice is imputed to the seller.

A seller approaches a real estate agent asking the agent to draft and negotiate a residential real estate contract for the seller’s property. The seller has already found a buyer to purchase the property. Is the agent permitted to draft and negotiate a purchase contract for the Seller’s benefit even if the property is not listed on the Multiple Listing Service (MLS)?

ANSWER:

Article 26, Section 1 of the Arizona Constitution states:

Any person holding a valid license as a real estate broker or a real estate salesman…when acting in such capacity as broker or salesman for the parties, or agent for one of the parties to a sale…shall have the right to draft or fill out and complete, without charge, any and all instruments incident thereto.

Therefore, as long as the real estate agent is representing the seller in the transaction, there is no requirement for the property to be listed on the MLS.  The real estate agent may proceed to draft a contract and negotiate the sale on behalf of the seller.

However, if the agent is not representing a party to the sale, they are not permitted to draft the purchase contract.

Quick Quiz

Fill in the Blank:
The estate agent may proceed to draft a contract and negotiate the sale on behalf of the.

The broker is a dual agent in the sale of a home. The seller and buyer have executed the Consent to Limited Representation Agreement. The seller has asked the broker for the phone number and the address of the buyer. Can the broker as a dual agent furnish the buyer’s address and phone number to the seller?

ANSWER:

Under lines 16-17 of the Consent to Limited Representation Agreement, the broker cannot release confidential information about the seller or the buyer without their written authorization. Therefore, the broker can furnish to the seller the buyer’s address and phone number only with written authorization from the buyer.