Does the Proposed NAR Settlement Change Your Brokerage Relationship in Florida?
Does the proposed NAR settlement change my brokerage relationship in Florida? This is a popular question we have been receiving over the past few weeks. This article will help clarify this and is a good refresher on brokerage relationships. For background information regarding the proposed settlement and its terms, please refer to our settlement resource center.
Short Answer: No. The proposed settlement does not change Florida law regarding transaction brokerage, single agency, or no brokerage relationships.
Understanding the difference between a single agent, transaction broker, and no brokerage relationship is critical. Under Florida statute 475.278, it is presumed that all licensees are operating as transaction brokers unless a single agent or no brokerage relationship is established in writing with a customer. This means that if you are representing as a single agent or no brokerage relationship, you better have it in writing. All three relationships owe different duties.
Transaction Broker: provides a limited form of representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity or as a single agent. The duties include the following:
1. Dealing honestly and fairly;
2. Accounting for all funds;
3. Using skill, care, and diligence in the transaction;
4. Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer;
5. Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing;
6. 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
Single Agent: The duties include the following:
1. Dealing honestly and fairly;
2. Loyalty;
3. Confidentiality;
4. Obedience;
5. Full disclosure;
6. Accounting for all funds;
7. Skill, care, and diligence in the transaction;
8. Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing; and
9. Disclosing all known facts that materially affect the value of residential real property and are not readily observable.
As noted above, there are 4 additional duties owed when representing as a single agent compared to transaction broker: Loyalty, Confidentiality, Obedience and Full Disclosure. Additionally, there are specific disclosure requirements when acting as a single agent. Unlike transaction brokers, single agents can NOT represent both seller and buyer in a real estate transaction.
No Brokerage Relationship: The duties include the following:
1. Dealing honestly and fairly;
2. Disclosing all known facts that materially affect the value of the residential real property which are not readily observable to the buyer; and
3. Accounting for all funds entrusted to the licensee.
As noted above, a no brokerage relationship creates the least amount of duties owed by a licensee. Additionally, there are specific disclosure requirements when acting in a no brokerage relationship.
Additional information on this subject can be found in Florida Statutes 475.272 and 475.278.
This information is provided for educational purposes only and should not be construed as legal advice or representation and should not be relied upon as such. Broward, Palm Beaches & St. Lucie Realtors® and its affiliated companies cannot provide legal advice or opine about the specifics of your situation.
By RWorld Staff
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Sources: RIS Media, Inman