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'What's In A Name?' (Part ll)

Originally Posted: November 21, 2011

John A. Viteritti

  |   6 Comments · Print Article

Let's focus on Dual Agent, Designated Agent, and Brokerís Agent. (Courtesy Photo: www.getrealestatelicense.net)

Southampton - As a prelude to reading this article, I would suggest that the reader should read "What's In A Name", and What Is Buyer Agency?". What I would like to focus on in this article is Dual Agent, Designated Agent, and Broker's Agent. Each of these titles is defined in the License Law of New York State and on the Agency Disclosure form required by Section 443 of that Law.

 • Dual Agent: (Must be in writing). If the broker is representing only one party in the transaction, seller or buyer, landlord or tenant, the broker is acting as a Single Agent. If the broker is representing both parties in the transaction, then Dual Agency is required. Who pays the broker's commission does not determine which party the broker is representing. The broker may be compensated by either party or both parties. The law requires knowledge and consent to dual compensation by both parties.

 • Designated Agency: This is a situation whereby the broker acts as a Dual Agent of the buyer and seller, landlord and tenant, and the broker designates one of his/her agents, (associate broker or licensed salesperson), to represent the seller or landlord and another to represent the buyer or tenant.

 • Broker's Agents: The broker who has a listing agreement with the seller engages the cooperation of other brokers, either as buyer's agents or sub-agents of the seller or agents of the listing broker. The essential difference between the cooperating brokers acting as sub-agents of the seller or agents of the listing broker is that the latter relieves the seller of vicarious liability for the cooperating broker's actions.

The real estate licensee is required by Section 443 to inform and explain the meanings of these agency relationships "at the point of first substantive contact" when dealing with sellers, buyers, landlords, tenants and have the respective parties sign the Agency Disclosure Form indicating that they have given their "informed consent" to the agency relationships. The law applies to residential properties of one to four units as well as condominiums and cooperatives regardless of the number of units.

The disclosure requirements must be met whenever the agency relationships change. Advance consent to Dual Agency, (which must be in writing), is permitted under clearly described circumstance by the statute and Department of State Regulation.

The key phrase is "informed consent." Signed forms do not, in and of themselves, constitute compliance with the law. A common complaint among agents is that the requirement that real estate agent present and explain the form at the point of "first substantive contact" alienates the customer, even though the law is intended to protect the interests of the consumer. The courts and the Department of State will not be persuaded by this argument. Real estate agents have been penalized and commissions lost due to non-compliance with the law.

Issues relating to Agency Disclosure are among the greatest number of complaints brought to the attention of the Department of State by members of the public.

Editor's Note: John will be teaching a 22.5 hours Real Estate Continuing Education classes at Long Island University in Riverhead on December 12, December 14, and December 16. For information and registration contact Rosemary Malone at 631-287-8334 or by email at rosemary.malone@liu.edu.


John is a St. John's University graduate, licensed Real Estate broker, lecturer, teaches real estate license classes at LIU, NYU, and Cook Maran Real Estate School, and is a well-respected consultant to the real estate industry. www.johnaviteritti.com


Guest (Author) from hamptons.com says::
North Fork Guest: Your observation is one of the main reasons why Agency Disclosure is required.
Nov 29, 2011 10:14 am

Guest (Author) from hamptons.com says::
My defintion doesn't state "hire"it states "cooperation." Only a principal can "hire" an agent.
Nov 29, 2011 9:50 am

Guest (Miriam) from New York City says::
I don't believe your definition of a Broker's Agent is correct. A listing agent can not hire a buyer's agent which is something a buyer must do. A listing agent also can't hire a sub-agent by definition there would be vicarious liability for the seller.
Nov 28, 2011 7:45 pm

Guest (north fork Realtor) from north fork says::
If many (not all) home buyers were truly aware, upon meeting the real estate agent that is going to collect their personal info (in order to locate properties and "help" them buy a home), that "their" agent then ***uses that info in negotiations to benefit the seller***, they would likely not agree to a broker agency situation. On the east end, brokers agents typically represent the listing company/seller. Not a home buyer.
Nov 28, 2011 7:18 pm

Guest (Author) from hamptons.com says::
It is true that agents on the East End typically represent sellers, whether they are the listing agent or the cooperating agent. It is also true that the Department of State requires that sellers and their agents cooperate with buyers agents but does not require agents to represent buyers.
Nov 28, 2011 4:37 pm

Guest (north fork Realtor) from north fork says::
A "primary difference" with the commonly used "brokers agent" (vs sub agent) on the east end is that in nearly all cases, the buyer of a property is working with an agent who represents the listing company- who represents the SELLER ONLY. Both agents represent the seller. The use of broker agency to represent the interest of buyers is extremely rare, and rarely (if ever) used on the east end (per a lawyer at NYSAR). Buyers, insist on buyer agency!
Nov 28, 2011 8:28 am

 

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