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FACTS: The broker represents the seller. An offer was submitted to the seller wherein the broker would become a dual agent (first offer). The broker has another offer coming in (second offer). The seller instructed the broker to disclose to the second buyer’s agent the amount of the first offer.Can the broker disclose to the second buyer’s agent the amount of the first offer when she is a dual agent in the first offer?

ANSWER:

No. With regard to dual agency, the Consent to Limited Representation (Consent) states that the broker cannot represent the interests of one party to the exclusion or detriment of the other party. (See consent at lines 9-10.) Here, if the broker advises the second buyer’s agent of the amount of the first offer, it would be to the detriment of the potential buyer who submitted the first offer. Therefore, the broker should not disclose the amount of the first offer.

ISSUE: Can a non-licensed brokerage employee discuss existing lease terms and/or renew an existing lease with a tenant?

ANSWER: 

No. An unlicensed assistant employed by a licensed real estate broker may:

  • Perform telephone duties to include calls to:
    1. Collect demographic information.
    2. Solicit interest in engaging the services of a licensee or brokerage.
    3. Set or confirm appointments (no other discussion) for:
      • a licensee to list or show property,
      • a buyer with a loan officer,
      • a property inspector to inspect a home,
      • a repair/maintenance person to perform repairs/maintenance,
      • an appraiser to appraise property,
    4. Mortgage and/or title companies to track the status of a file, check daily interest rates and points, whether the buyer has been qualified, confirm a closing appointment for a licensee, and so forth.
  • Assist a licensee at an open house.
  • Unlock a home for a licensee so that licensee can show a buyer the property or preview the property (no discussion about the property).
  • Deliver documents (as a mail or delivery service only).

An unlicensed assistant shall not perform the following activities:

  • Hold/host an open house without an agent being present,
  • Perform a walk-through inspection,
  • Answer questions relating to a transactional document,
  • Give instructions to inspectors, appraisers or maintenance/repair people.

See Arizona Department of Real Estate Substantive Policy Statement No. 2005.04.

Accordingly, a non-licensed employee may not discuss lease terms with a potential tenant nor renew a lease.

Quick Quiz

Fill in the Blank:

Accordingly, a non- employee may not discuss lease terms with a potential nor renew a lease.

An agent switched from Broker A to Broker B. Although Broker A transferred several listings to Broker B, Broker A kept one particular listing. Broker A wants the agent to continue to work with the client on this particular listing and intends on paying the agent a commission. Is it proper for the agent to continue working on a listing with Broker A while employed by Broker B?

ANSWER:

No.  Pursuant to A.R.S. § 32-2153, a licensee cannot represent a broker other than the broker to whom the licensee is licensed. In addition, under A.A.C. R4-28-306(A)(2), an agent can only perform real estate services on behalf of the agent’s employing broker. Therefore, the agent employed by Broker B cannot work on the listing for Broker A.

A licensee cannot represent a broker other than the broker to whom?



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N O P Q R S T U V W X Y Z

ISSUE: The real estate agent generally represents tenants looking for rental residential property. The real estate agent discusses agency issues with tenants at the beginning of the representation and confirms his representation in writing when the rental agreement is executed. Should the real estate agent also have the tenant review and sign the AAR Real Estate Agency Disclosure and Election form?

ANSWER:

Yes. The AAR Real Estate Agency Disclosure and Election form are designed for use by sellers and buyers, as well as for Landlords and Tenants (see line 3).

ISSUE: The broker had a listing agreement on Lot A. One year after the expiration of this listing the broker purchased adjoining Lot B. The broker wants to develop Lot B. The owner of Lot A is contending that his consent is required to any development of Lot B by the broker because of the previous agency relationship. Can the broker develop Lot B without the consent of the owner of Lot A?

ANSWER:

Yes. The general rule is that the agency relationship terminates when the listing agreement expires. Therefore, unless the broker is using confidential information acquired during the listing of Lot A, the consent of the owner of Lot A is not required for the development of Lot B by the broker.

FACTS: The owner of the property is also a real estate agent who heads a real estate team that is listing the property for sale. The real estate team holds an open house during which potential buyers visit the property. Subsequently, one of the attendants of the open house wants to make an offer to purchase the property and wants to use one of the team members as his agent. The member the open house attendant wants to use is the wife of the owner/team leader. The property is held exclusively in the husband’s name. Can the wife/team member represent the buyer in this transaction as a dual agent?

ANSWER:

Dual agency imposes restrictions on the conduct of a licensee.  Among others, a dual agent may not favor one party over another nor disclose confidential information, such as the price the buyer is willing to pay, without the informed consent of that party. See Haymes v. Rogers, 70 Ariz. 408, 222 P.2d 789 (1950).  Ordinarily, this may not be a problem, and a dual agency is in fact specifically authorized by Arizona law with the written consent of both parties. See A.A.C. R4-28-1101(F).  In some situations, however, an agent’s relationship presents an un-waivable conflict.  If the wife has an ownership interest in the property (i.e., community property) the conflict cannot be waived and representation is improper.  If the property is the sole and separate property of the husband, it still presents an appearance of partiality.  Additionally, while the dual agency is permitted by Arizona law, judicial skepticism of this arrangement exists. See Marmis v. Solot Co., 117 Ariz. 499, 503, 573 P.2d 899, 903 (App.  1977). For these reasons, the agent should avoid representing the seller as a dual agent.

Quick Quiz

Fill in the Blank:

Dual agency restrictions on the conduct of a licensee.