AN
ACT Relating to real estate brokerage relationships including different
licensees affiliated with the same broker representing different buyers and
sellers in competing transactions involving the same property, termination of
those relationships, and consumer information about those relationships;
amending RCW 18.86.020, 18.86.040, 18.86.050, 18.86.060, 18.86.070, 18.86.080, and
18.86.120; creating a new section; providing an effective date; and declaring
an emergency.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
18.86.020 and 1996 c 179 s 2 are each amended to read as follows:
(1)
A licensee who performs real estate brokerage services for a buyer is a buyer's
agent unless the:
(a)
Licensee has entered into a written agency agreement with the seller, in
which case the licensee is a seller's agent;
(b)
Licensee has entered into a subagency agreement with the seller's agent, in
which case the licensee is a seller's agent;
(c)
Licensee has entered into a written agency agreement with both parties, in
which case the licensee is a dual agent;
(d)
Licensee is the seller or one of the sellers; or
(e)
Parties agree otherwise in writing after the licensee has complied with RCW
18.86.030(1)(f).
(2)
In a transaction in which different licensees affiliated with the same broker
represent different parties, the broker is a dual agent, and must obtain the
written consent of both parties as required under RCW 18.86.060. In such a
case, each licensee shall solely represent the party with whom the licensee has
an agency relationship, unless all parties agree in writing that both licensees
are dual agents.
(3)
A licensee may work with a party in separate transactions pursuant to different
relationships, including, but not limited to, representing a party in one
transaction and at the same time not representing that party in a different
transaction involving that party, if the licensee complies with this chapter in
establishing the relationships for each transaction.
Sec.
2. RCW
18.86.040 and 1996 c 179 s 4 are each amended to read as follows:
(1)
Unless additional duties are agreed to in writing signed by a seller's agent,
the duties of a seller's agent are limited to those set forth in RCW 18.86.030
and the following, which may not be waived except as expressly set forth in (e)
of this subsection:
(a)
To be loyal to the seller by taking no action that is adverse or detrimental to
the seller's interest in a transaction;
(b)
To timely disclose to the seller any conflicts of interest;
(c)
To advise the seller to seek expert advice on matters relating to the
transaction that are beyond the agent's expertise;
(d)
Not to disclose any confidential information from or about the seller, except
under subpoena or court order, even after termination of the agency
relationship; and
(e)
Unless otherwise agreed to in writing after the seller's agent has complied
with RCW 18.86.030(1)(f), to make a good faith and continuous effort to find a
buyer for the property; except that a seller's agent is not obligated to seek
additional offers to purchase the property while the property is subject to an
existing contract for sale.
(2)
((A seller's agent may show alternative properties not owned by the seller
to prospective buyers and may list competing properties for sale without
breaching any duty to the seller)) (a) The showing of properties not
owned by the seller to prospective buyers or the listing of competing
properties for sale by a seller's agent does not in and of itself breach the
duty of loyalty to the seller or create a conflict of interest.
(b)
The representation of more than one seller by different licensees affiliated
with the same broker in competing transactions involving the same buyer does
not in and of itself breach the duty of loyalty to the sellers or create a
conflict of interest.
Sec.
3. RCW
18.86.050 and 1996 c 179 s 5 are each amended to read as follows:
(1)
Unless additional duties are agreed to in writing signed by a buyer's agent,
the duties of a buyer's agent are limited to those set forth in RCW 18.86.030
and the following, which may not be waived except as expressly set forth in (e)
of this subsection:
(a)
To be loyal to the buyer by taking no action that is adverse or detrimental to
the buyer's interest in a transaction;
(b)
To timely disclose to the buyer any conflicts of interest;
(c)
To advise the buyer to seek expert advice on matters relating to the
transaction that are beyond the agent's expertise;
(d)
Not to disclose any confidential information from or about the buyer, except
under subpoena or court order, even after termination of the agency
relationship; and
(e)
Unless otherwise agreed to in writing after the buyer's agent has complied with
RCW 18.86.030(1)(f), to make a good faith and continuous effort to find a
property for the buyer; except that a buyer's agent is not obligated to: (i)
Seek additional properties to purchase while the buyer is a party to an
existing contract to purchase; or (ii) show properties as to which there is no
written agreement to pay compensation to the buyer's agent.
(2)
((A buyer's agent may show properties in which the buyer is interested to other
prospective buyers without breaching any duty to the buyer)) (a) The
showing of property in which a buyer is interested to other prospective buyers
by a buyer's agent does not in and of itself breach the duty of loyalty to the
buyer or create a conflict of interest.
(b)
The representation of more than one buyer by different licensees affiliated
with the same broker in competing transactions involving the same property does
not in and of itself breach the duty of loyalty to the buyers or create a conflict
of interest.
Sec.
4. RCW
18.86.060 and 1996 c 179 s 6 are each amended to read as follows:
(1)
Notwithstanding any other provision of this chapter, a licensee may act
as a dual agent only with the written consent of both parties to the
transaction after the dual agent has complied with RCW 18.86.030(1)(f), which
consent must include a statement of the terms of compensation.
(2)
Unless additional duties are agreed to in writing signed by a dual agent, the
duties of a dual agent are limited to those set forth in RCW 18.86.030 and the
following, which may not be waived except as expressly set forth in (e) and (f)
of this subsection:
(a)
To take no action that is adverse or detrimental to either party's interest in
a transaction;
(b)
To timely disclose to both parties any conflicts of interest;
(c)
To advise both parties to seek expert advice on matters relating to the
transaction that are beyond the dual agent's expertise;
(d)
Not to disclose any confidential information from or about either party, except
under subpoena or court order, even after termination of the agency
relationship;
(e)
Unless otherwise agreed to in writing after the dual agent has complied with
RCW 18.86.030(1)(f), to make a good faith and continuous effort to find a buyer
for the property; except that a dual agent is not obligated to seek additional
offers to purchase the property while the property is subject to an existing
contract for sale; and
(f)
Unless otherwise agreed to in writing after the dual agent has complied with
RCW 18.86.030(1)(f), to make a good faith and continuous effort to find a
property for the buyer; except that a dual agent is not obligated to: (i) Seek
additional properties to purchase while the buyer is a party to an existing
contract to purchase; or (ii) show properties as to which there is no written
agreement to pay compensation to the dual agent.
(3)
((A dual agent may show alternative properties not owned by the seller to
prospective buyers and may list competing properties for sale without breaching
any duty to the seller)) (a) The showing of properties not owned by the
seller to prospective buyers or the listing of competing properties for sale by
a dual agent does not in and of itself constitute action that is adverse or
detrimental to the seller or create a conflict of interest.
(b)
The representation of more than one seller by different licensees affiliated
with the same broker in competing transactions involving the same buyer does
not in and of itself constitute action that is adverse or detrimental to the
sellers or create a conflict of interest.
(4)
((A dual agent may show properties in which the buyer is interested to other
prospective buyers without breaching any duty to the buyer)) (a) The
showing of property in which a buyer is interested to other prospective buyers
or the presentation of additional offers to purchase property while the
property is subject to a transaction by a dual agent does not in and of itself
constitute action that is adverse or detrimental to the buyer or create a
conflict of interest.
(b)
The representation of more than one buyer by different licensees affiliated
with the same broker in competing transactions involving the same property does
not in and of itself constitute action that is adverse or detrimental to the
buyers or create a conflict of interest.
Sec.
5. RCW
18.86.070 and 1996 c 179 s 7 are each amended to read as follows:
(1)
The agency relationships set forth in this chapter commence at the time that
the licensee undertakes to provide real estate brokerage services to a
principal and continue until the earliest of the following:
(a)
Completion of performance by the licensee;
(b)
Expiration of the term agreed upon by the parties; ((or))
(c)
Termination of the relationship by mutual agreement of the parties; or
(d)
Termination of the relationship by notice from either party to the other.
However, such a termination does not affect the contractual rights of either
party.
(2)
Except as otherwise agreed to in writing, a licensee owes no further duty after
termination of the agency relationship, other than the duties of:
(a)
Accounting for all moneys and property received during the relationship; and
(b)
Not disclosing confidential information.
Sec.
6. RCW
18.86.080 and 1996 c 179 s 8 are each amended to read as follows:
(1)
In any real estate transaction, the broker's compensation may be paid by the
seller, the buyer, a third party, or by sharing the compensation between
brokers.
(2)
An agreement to pay or payment of compensation does not establish an agency
relationship between the party who paid the compensation and the licensee.
(3)
A seller may agree that a seller's agent may share with another broker the
compensation paid by the seller.
(4)
A buyer may agree that a buyer's agent may share with another broker the
compensation paid by the buyer.
(5)
A broker may be compensated by more than one party for real estate brokerage
services in a real estate transaction, if those parties consent in writing at
or before the time of signing an offer in the transaction.
(6)
A buyer's agent or dual agent may receive compensation based on the purchase
price without breaching any duty to the buyer.
(7)
Nothing contained in this chapter ((obligates a buyer or seller to pay
compensation to a licensee, unless the buyer or seller has entered into a written
agreement with the licensee specifying the terms of such compensation)) negates
the requirement that an agreement authorizing or employing a licensee to sell
or purchase real estate for compensation or a commission be in writing and
signed by the seller or buyer.
Sec.
7. RCW
18.86.120 and 1996 c 179 s 13 are each amended to read as follows:
The
pamphlet required under RCW 18.86.030(1)(f) shall consist of the entire text of
RCW 18.86.010 through 18.86.030((,)) and 18.86.040 through
18.86.110((, and 18.86.900)) with a separate cover page. The pamphlet
shall be 8 1/2 by 11 inches in size, the text shall be in print no smaller than
10-point type, the cover page shall be in print no smaller than 12-point type,
and the title of the cover page "The Law of Real Estate Agency" shall
be in print no smaller than 18-point type. The cover page shall be in the
following form:
|
The
Law of Real Estate Agency
This
pamphlet describes your legal rights in dealing with a real estate broker or
salesperson. Please read it carefully before signing any documents.
|
The following is only a brief summary of the attached
law:
Sec. 1. Definitions. Defines the specific terms used in
the law.
Sec. 2. Relationships between Licensees and the Public.
States that a licensee who works with a buyer or tenant represents that buyer
or tenant‑-unless the licensee is the listing agent, a seller's subagent,
a dual agent, the seller personally or the parties agree otherwise. Also
states that in a transaction involving two different licensees affiliated with
the same broker, the broker is a dual agent and each licensee solely represents
his or her client‑-unless the parties agree in writing that both licensees
are dual agents.
Sec. 3. Duties of a Licensee Generally. Prescribes the
duties that are owed by all licensees, regardless of who the licensee
represents. Requires disclosure of the licensee's agency relationship in a
specific transaction.
Sec. 4. Duties of a Seller's Agent. Prescribes the
additional duties of a licensee representing the seller or landlord only.
Sec. 5. Duties of a Buyer's Agent. Prescribes the
additional duties of a licensee representing the buyer or tenant only.
Sec. 6. Duties of a Dual Agent. Prescribes the
additional duties of a licensee representing both parties in the same
transaction, and requires the written consent of both parties to the licensee
acting as a dual agent.
Sec. 7. Duration of Agency Relationship. Describes when
an agency relationship begins and ends. Provides that the duties of accounting
and confidentiality continue after the termination of an agency relationship.
Sec. 8. Compensation. Allows brokers to share
compensation with cooperating brokers. States that payment of compensation
does not necessarily establish an agency relationship. Allows brokers to
receive compensation from more than one party in a transaction with the
parties' consent.
Sec. 9. Vicarious Liability. Eliminates the common law
liability of a party for the conduct of the party's agent or subagent, unless
the agent or subagent is insolvent. Also limits the liability of a broker for
the conduct of a subagent associated with a different broker.
Sec. 10. Imputed Knowledge and Notice. Eliminates the
common law rule that notice to or knowledge of an agent constitutes notice to
or knowledge of the principal.
Sec. 11. Interpretation. This law replaces the
fiduciary duties owed by an agent to a principal under the common law, to the
extent that it conflicts with the common law.
((Sec. 12. Effective Date. This law generally takes
effect on January 1, 1997.))
NEW
SECTION. Sec. 8.
Amendments set forth in sections 1 through 6 of this act are not required to be
included in the pamphlet on the law of real estate agency required under RCW
18.86.030(1)(f) and 18.86.120 until January 1, 1998.
NEW
SECTION. Sec. 9.
Sections 1 through 6 and 8 of this act are necessary for the immediate
preservation of the public peace, health, or safety, or support of the state
government and its existing public institutions, and take effect immediately.
NEW
SECTION. Sec. 10.
Section 7 of this act takes effect January 1, 1998.
