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The agent, while not a party to the transaction, is representing his wife and son in the purchase of a property and has disclosed this relationship to the seller. Is it advisable for the agent to also represent the seller of the property as a dual agent?

ANSWER: 

No.

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.

In this instance, and assuming the property is being purchased with sole and separate funds of the spouse and son (as opposed to community property of the husband and wife), the agent is not a direct party to the transaction.  However, the agent’s relationship with the buyers presents, at a minimum, the appearance of partiality. Additionally, while a 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.

Dual agency imposes restrictions on?



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Agent A has a property listed for sale. Agent A wishes to go on vacation. She will have Agent B from her brokerage attend to the listing while she is out of town. Does the Arizona Department of Real Estate require an assignment of agency from Agent A to Agent B?

ANSWER:

No.

Arizona courts recognize the agency relationship between the broker and client in a real estate transaction. See Jenkins v. Irvin, 20 Ariz. 164, 178 P. 33 (1919). Therefore, no assignment of agency is required as both agents, through the broker, have an agency with the seller.

As a best business practice tip, the broker should have a Policy and Procedures Manual detailing what is required of an agent when they go on vacation.

The brokerage represented the buyer of a property in 1996. As part of that transaction, the buyer obtained title insurance and the title company disclosed to the buyer that there was an easement for access to the property. Recently, however, the buyer was informed that the easement is allegedly invalid. The buyer and a neighboring property owner are litigating the dispute. The buyer has also sent several demand letters to the brokerage, in which the buyer claims that the brokerage has an ongoing obligation to assist her in resolving the dispute and potentially participating in the resolution. Does the brokerage owe a duty to the buyer 18 years after the close of escrow to help resolve the dispute?

ANSWER: 

No

Because the transaction closed approximately 18 years ago, no common law or statutory duties are owed by the brokerage to the buyer.  It is generally recognized that, absent an agreement to the contrary, the fiduciary duties owed by a brokerage to its client end at the close of escrow.  See Coldwell Banker Commercial Group, Inc. v. Camelback Office Park, 156 Ariz. 226, 231, 751 P.2d 542, 547 (1988) (recognizing that once an agreement between principal and agent is terminated or completed, “the fiduciary relationship is ended and the broker ‘is free to act for himself or the opposing party as long as he does not hinder, delay or interfere’ with a transaction which the agreement was intended to bring into being.”).  Moreover, assisting in or negotiating a legal dispute is beyond the scope of services which a licensee can legally provide.  Accordingly, at this point, the brokerage does not owe any ongoing duties to the buyer and the brokerage has no legal duty or obligation to assist the buyer in her current dispute with the neighboring property owner.

Quick Quiz

Fill in the Blank:

The does not owe any ongoing duties to the buyer and the brokerage has no legal duty or obligation to assist the buyer in her current dispute with the neighboring owner.

The buyer’s agent (a female) has shown the buyer (a male) several homes. The buyer makes an offer on a home, but the offer is rejected by the seller with no counter-offer. The listing agent then contacts the buyer’s agent and states that the reason that the buyer’s offer was rejected without a counter-offer, was that the buyer is a registered sex offender. The buyer’s agent now wants to immediately terminate the representation of the buyer. Can this representation of the buyer be immediately terminated?

ANSWER:

Yes. Registered sex offenders are not a protected class, and the female buyer’s agent (or a male buyer’s agent) is not required to continue to show homes to the buyer.

The seller of the home is an LLC. One of seven members in the LLC is a real estate licensee employed by Brokerage firm “A.” This member of the LLC discloses to all potential buyers his licensing status. The LLC has a listing agreement with an agent employed by Brokerage firm “B.” An offer to buy the home is presented by a buyer’s agent who is employed by Brokerage firm “A.” Is this buyer’s agent a dual agent because a member of the LLC is also employed by Brokerage firm “A?”

ANSWER:

Probably not. Although the real estate licensee that is a member of the LLC has to disclose his licensing status, this licensee merely by being a member of the LLC does not represent the LLC in the transaction. Furthermore, the LLC is represented by a listing broker employed by the separate Brokerage firm “B.”

real estate licensee that is a member of the LLC



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