Terminology from the Florida Statutes with regard to the three types of representation
This disclosure is to be given "at first contact." [Florida Stat., sect. 475.276 (1)] According to the statute, the disclosure is to be given then,
. . . except in situations where a licensee knows that the potential seller or buyer is represented by a single agent or a transaction broker. If first contact between a licensee and a customer occurs during the course of a telephone conversation or any other communication in which the licensee is unable to provide the required notice of nonrepresentation, the licensee shall provide an oral notice and thereafter provide the required notice of nonrepresentation at the time of the first face-to-face contact, execution of a brokerage relationship agreement, or execution of a contractual agreement for purchase and sale, whichever occurs first. [Florida Stat., sect. 475.276 (2)]
The effect of this disclosure should be to let consumers know just where they stand vis a vie the licensee they are dealing with. Also it should minimize the occasions when an unintended, unauthorized, and undisclosed dual agency arises because of the behavior of the parties.
The statutory form for this notice is reproduced as follows: [Florida Stat., sect. 275.276 (3)]
NOTICE OF NONREPRESENTATION
FLORIDA LAW REQUIRES THAT REAL ESTATE LICENSEES PROVIDE THIS NOTICE AT FIRST CONTACT TO ALL POTENTIAL SELLERS AND BUYERS OF REAL ESTATE.
You are hereby notified that ______________________ (insert name of brokerage firm) and I do not represent you in any capacity. You should not assume that any real estate broker or salesperson represents you unless you agree to engage a real estate licensee in an authorized brokerage relationship, either as a single agent or as a transaction broker. You are advised not to disclose any information you want to be held in confidence until you make a decision on representation. Your signature below acknowledges receipt of this form and does not establish a brokerage relationship.
__________________________________
Date (Signature Optional)
__________________________________
(Signature Optional)
After a consumer receives the notice of non-representation, several choices are presented. If it is mutually agreeable, the licensee and the consumer may enter into an authorized brokerage relationship, which under the statute, must fit into one of three possibilities. Each of these also contains an appropriate disclosure requirement. They are:
- Single agent for the seller,
- Single agent for the buyer, and
- Transaction broker.
Clearly the most likely scenario in which a single agency for the seller will develop is when a licensee secures a listing contract. Such a result is well within the comfort zone of most licensees, because listing brokers have traditionally been single agents for their sellers in most instances anyway.
It should be noted that a listing broker does have latitude under the statute to form a transaction brokerage relationship with the seller instead of a single agency if that is mutually agreeable to the parties. Further, the new law also provides that the licensee may begin as a single agent for the seller and then at a later point, with the agreement and consent of the parties change to a transaction brokerage relationship. Of course appropriate disclosure is required. [Florida Stat., sect. 475.278 (1)]
Single agency for the buyer is a newer concept in brokerage representation than single agency for the seller, but it has grown rapidly in popularity. Most markets include brokers who advertise their willingness to provide this service, and some brokers proclaim that they will provide only this service, working exclusively as buyers’ brokers.
In any event, if a licensee acts as a single agent for either the seller or the buyer, the statute requires the following disclosure to be made.
FLORIDA LAW REQUIRES THAT REAL ESTATE LICENSEES OPERATING AS SINGLE AGENTS DISCLOSE TO BUYERS AND SELLERS THEIR DUTIES.
As a single agent, _________________ (insert name of Real Estate Entity and its Associates) owe to you the following duties:
- Dealing honestly and fairly;
- Loyalty;
- Confidentiality;
- Obedience;
- Full disclosure;
- Accounting for all funds;
- Skill, care, and diligence in the transaction; and
- Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing.
___________ ___________________________
Date Signature [Florida Stat., sect. 475.278 (3)]
If, after a single agency is established, the licensee wants to change to a transaction brokerage, the statute contains another disclosure form to accomplish this task as follows:
FLORIDA LAW ALLOWS REAL ESTATE LICENSEES WHO REPRESENT A BUYER OR SELLER AS A SINGLE AGENT TO CHANGE FROM A SINGLE AGENT RELATIONSHIP TO A TRANSACTION BROKERAGE RELATIONSHIP IN ORDER FOR THE LICENSEE TO ASSIST BOTH PARTIES IN A REAL ESTATE TRANSACTION BY PROVIDING A LIMITED FORM OF REPRESENTATION TO BOTH THE BUYER AND THE SELLER. THIS CHANGE IN RELATIONSHIP CANNOT OCCUR WITHOUT YOUR PRIOR WRITTEN CONSENT.
_____________ I agree that my agent may assume the role and duties of a transaction broker. (must be initialed or signed) [Florida Stat., sect. 475.278 (3)]
Naturally, the disclosure form for the transaction brokerage relationship itself must also be used, whether the licensee is switching from a single agency to a transaction brokerage or simply engaging in a transaction brokerage relationship initially without having first been a single agent.
To create the transaction brokerage relationship, the statute provides the following disclosure form for use by licensees:
FLORIDA LAW REQUIRES THAT REAL ESTATE LICENSEES OPERATING AS TRANSACTION BROKERS DISCLOSE TO BUYERS AND SELLERS THEIR ROLE AND DUTIES IN PROVIDING A LIMITED FORM OF REPRESENTATION.
As a transaction broker, _____________(insert name of Real Estate Firm and its Associates), provides to you a limited form of representation that includes the following duties:
- Dealing honestly and fairly;
- Accounting for all funds;
- Using skill, care, and diligence in the transaction;
- Disclosing all known facts that materially affect the value of real property and are not readily observable to the buyer;
- Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing;
- Limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential; and
- Any additional duties that are entered into by this or by separate written agreement.
Limited representation means that a buyer or seller is not responsible for the acts of the licensee. Additionally, parties are giving up their rights to the undivided loyalty of the licensee. This aspect of limited representation allows a licensee to facilitate a real estate transaction by assisting both the buyer and the seller, but a licensee will not work to represent one party to the detriment of the other party.