There were 3 important changes to the agency law:
This article will focus on the daily issues of representation that occur for licensees. Read the RCW 18.86.020 to help you understand the revised agency law.
The following chart helps to summarize the effects of the revised law.
|Situation:||In which case:|
|Licensee is the seller.||The licensee is a seller’s agent.|
|In-house transactions where one licensee represents the seller and one licensee represents the buyer.||The designated broker and the branch manager are dual agents.|
|In-house transactions where the managing broker manages both the seller’s agent and the buyer’s agent.||The managing broker is a dual agent.|
|Licensee performs brokerage services for a buyer and there is no agency agreement to represent the seller or the seller and buyer together.||The licensee is a buyer’s agent.|
|The real estate firm has a written agency agreement appointing the licensee to represent the seller.||The licensee is a seller’s agent.|
|The licensee has a subagency agreement with the seller’s licensee or firm.||The licensee is a seller’s agent.|
|The real estate firm has written agency agreement appointing the affiliated licensee to represent both parties.||The licensee is a dual agent.|
Questions to consider when applying this law to your daily practice:
Please keep in mind that there are several considerations when addressing these and similar questions. Licensing requirements and civil responsibilities should both be considered. Hopefully the above questions will start your quest for answers and guidance in complying with the revised law. We strongly encourage you to begin with your designated broker and your company’s legal counsel. Your professional trade association or multiple listing service are also very good sources of information.
Obtaining signatures on a purchase and sale agreement falls under the definition of real estate brokerage services and can only be performed by a licensed real estate agent. If a real estate agent asks an escrow agent to obtain signatures, the real estate agent is aiding and abetting unlicensed real estate practice, unless the escrow agent is also a licensed real estate broker.
The duty of the escrow officer is to follow the instructions of the buyer and seller as presented in the negotiated purchase and sale agreement. When escrow officers are put in the position of getting documents signed that are part of the purchase and sale agreement, their neutrality is compromised and they’re conducting unlicensed real estate activity.
The real estate licensee should provide escrow with signed negotiated documents. When changes are needed, it’s the real estate licensee’s responsibility to provide signed documents.
The Real Estate Commission recently approved the Washington State Guidelines for Internet Advertising and Social Media on the Internet to ensure that all members of the real estate industry have the information they need when using social media in their real estate practice.
In mid-September 2011, the Department of Licensing and the Real Estate Commission received a letter from the Seattle King County Realtors requesting the commission re-examine the application of the title “managing broker.” The letter stated that the title “managing broker” was being misunderstood by clients regarding the professional capacity and the licensee’s activities.
At the September commission meeting in Spokane, the commission decided to form a task force that would address the issues and make recommendations to the full Real Estate Commission and the Department of Licensing.
Commissioner Wright was asked to chair the task force. Commissioner Pilant and Salazar were also asked to be members. Commissioner Wright quickly put together representatives from Eastern Washington, Clark County, Washington Realtors and representatives from the commercial and property management disciplines.
Commissioner Wright will give a detailed report to the full commission meeting on December 6, 2011. However, one aspect of the discussion was to ensure that licensees understood the advertising rules on the use of the title “managing broker.” The task force was fortunate to have Annie Fitzsimmons as one of the representatives, and she was able to address the issue in the Realtors® Legal Hotline. Below is her question and answer which will help licensees in understanding the current rules regarding using the title of “managing broker:”
Managing broker is not managing any brokers and believes it is confusing to consumers to use the title “managing broker” on business cards and advertising. First, is it necessary that managing broker use that title as identification on business cards and other advertising? With that said, managing broker is proud of having worked hard to earn the managing broker license. Is there some other title managing broker can use to describe himself on advertising?
Managing broker is not required to use the term “managing broker” to identify or describe himself in any advertising or marketing. Licensees have never been required to include their licensing status in marketing or on business cards.
Moreover, every licensee, managing brokers and brokers alike, may use any descriptive term to identify him or herself that is not false, deceptive or misleading. Brokers often use descriptions such as “relocation specialist” or “waterfront sales” or “condominium expert.” So long as the description used is not false, deceptive or misleading, the description can be used.
An example of a false description would be a person licensed only as a broker describing himself as a managing broker. The term “managing broker” is a defined term under the license law, and a person with only a broker’s license does not meet the definition of a “managing broker.” Therefore, use of that term in that situation, would be false.
Reprinted with permission from the Washington Association of REALTORS Legal Hotline. Hotline Attorney Annie Fitzsimmons writes the Legal Hotline Question and Answer of the week, a free service to members of the Washington REALTORS. The Legal Hotline provides legal information and education, not legal representation.
On July 1, 2010, the real estate licensing education requirements changed with the revised RCW 18.85 real estate licensing law. After almost a year since implementation, there’s still confusion regarding the pre-license education requirement for real estate licensing. The following table should clear up the confusion:
|Successfully complete 90 hours of approved real estate education within 2 years before applying for the exam. This education must include:
||Successfully complete 90 hours of approved real estate education within 3 years before applying for the exam. This education must include:
Please note: If you take Advanced Real Estate Practices toward the broker pre-license requirement, it won’t be accepted. You must take the Real Estate Practices course as stated above.
As a result of recent economic challenges, many homeowners need to sell their home, but owe more than the home is worth. We’ve partnered with the Department of Financial Institutions to create advisories to help sellers in this situation and provide guidelines for licensees working with short sales. For more information, see:
We have received many questions from licensees about issuing brokers price opinions and if the licensee can receive direct compensation. A brokers price opinion, often referred to as a comparative market analysis (CMA), is any oral or written report of property value. RCW 18.140.010(4) requires individuals producing brokers price opinions to be licensed under RCW 18.85.
We have determined that an individual must be actively licensed in order to issue a brokers price opinion. Please be advised that it is considered a violation of RCW 18.85.230(19) for a licensee to receive a commission, compensation, or any form of valuable consideration from anyone except the licensed real estate broker with whom he or she is licensed.
Routine audits of broker transaction files still indicate that a large number of firms are not complying with the delivery and/or deposit requirements regarding earnest money.
All earnest money funds must be deposited into the brokers trust bank account not later than the next banking day unless the purchase and sale agreement states the check is to be held for a specific period of time or the occurrence of a specific event. The delivery of the funds to escrow is the broker's responsibility.
We continue to receive complaints from sellers when the transaction fails that the funds were not deposited or never delivered to the escrow company. Not only is the untimely delivery of earnest money a licensing problem, but also not providing this information to the seller that the earnest money was never collected or delivered can be considered failure to disclose.