March 22nd, 2011 at 11:11 pm
It is not unusual, especially in the context of leases, for one of the parties to a transaction to be unrepresented by a broker. When that situation arises, the single agent involved believes that since she only represents the seller/landlord, it does not matter what help she gives to the buyer/tenant because she has no duties to that party. While there is some truth to that belief, it is not that simple. After all, when a buyer or tenant is unrepresented, it is not uncommon for the listing agent to end up doing more work than normal. That is natural, of course, because it is in the listing agent’s interest to assist in moving the transaction along and getting it closed. As a result, the listing agent may help get documents signed by the buyer/tenant, or may answer their questions about those documents or some part of the transaction. In a deal with two agents, of course, those things would normally be done by the selling agent. As a result, by helping in this way, the question arises whether we are “representing” the buyer/tenant or accepting certain obligations that we would otherwise not have. Of course, in my most “lawyerly” way, my answer would be maybe. Depending on how far over the line an agent goes, it is possible that, by their actions, they would be deemed to have accepted the representation of the buyer/tenant. After all, the listing agent is now keeping the entire commission, including the portion that normally goes to the buyer/tenant’s agent. Therefore, if you are ever faced with this situation, remember the following:
1. Always get a “Buyer Non-Agency” Form (CAR Form BNA) signed. With that document, we can always argue that we advised the client we did not represent them and that all of our actions were taken on behalf of the seller/landlord.
2. Be very careful what you do for the buyer/tenant. While providing a document or two along the way may be ok, always accompany those documents with a recommendation that the buyer/tenant talk to their attorney for legal advice. Furthermore, do not give the buyer/tenant advice. Provide the documents only, and stay away for explanations or recommendations. Those things are typically done by the client’s representative. As always, please let us know if you have any questions.
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