INITIAL
AGENCY DISCLOSURE PAMPHLET
Real estate brokers and principal real
estate brokers have legal obligations, called affirmative duties, to both buyers
and sellers in a real estate transaction.
Oregon Revised Statute (ORS) 696.805
lists the affirmative duties of a licensed real estate broker or principal real
estate broker acting as a seller’s agent.
The affirmative duties of a broker or
principal broker acting as a buyer’s agent are found in ORS
696.810.
ORS 696.815(1) allows a real estate
licensee to represent both the seller and the buyer in a real estate transaction
under a disclosed limited agency agreement, provided there is full disclosure of
the relationship under the agreement.
Oregon Administrative Rules (OAR),
adopted by the Oregon Real Estate Agency, provide the form and content of the
disclosures and the related pamphlet. OAR 863-015-0215 is set forth below for
the convenience of licensees. The Agency has provided a sample Initial Agency
Disclosure Pamphlet after the broken line that meets the requirements of OAR
863-015-0125.
863-015-0215
Initial Agency Disclosure
Pamphlet
(1)
For purposes of this rule, “at first contact” means at the time the
agent has sufficient contact information about a person to be able to provide an
initial agency disclosure pamphlet to that person. Contact with a person
includes, but is not limited to contacts in person, by telephone, over the
Internet, by electronic mail, or by similar
methods.
(2)
An agent shall provide a copy of the initial agency disclosure
pamphlet, which complies with section (5) of this rule, at first contact
with:
(a)
A prospective party to a real property transaction;
or
(b)
An unrepresented party seeking representation during the course of
a real property transaction.
(3)
An agent must provide the initial agency disclosure pamphlet in a
written format by electronic mail, over the Internet, by USPS mail, facsimile,
hand delivery or similar delivery method.
(4)
An agent need not provide a copy of the initial agency disclosure
pamphlet to a party who has, or may be reasonably assumed to have, received a
copy of the pamphlet from another agent.
(5)
The initial
agency disclosure pamphlet must
contain:
(a) The
following information, directed to the
consumer:
(A) A licensed real estate broker or principal broker
must give a copy of the initial agency disclosure pamphlet at first contact with
a prospective party to a real property transaction or at first contact with an
unrepresented party seeking representation during the course of a real property
transaction.
(B) A licensed real estate broker or principal broker
need not provide a copy of the initial agency disclosure pamphlet to a party who
has, or may be reasonably assumed to have, received a copy of the pamphlet from
another broker.
(C) The pamphlet describes the legal relationship between
a broker and a consumer when the broker acts as the consumer’s agent;
and
(D) The pamphlet is informational only and may not be
construed to be evidence of intent to create an agency relationship, as provided
in ORS 696.820.
(b) A general definition of an agency relationship and
the three real estate agency relationships of seller’s agent, a buyer’s agent
and a disclosed limited agent.
(c) The definition of “confidential information” in ORS
696.800.
(d) The affirmative duties
and responsibilities of a seller’s agent under ORS
696.805.
(e) The affirmative duties and responsibilities of a
buyer’s agent under ORS 696.810.
(f) The affirmative duties and responsibilities of a
disclosed limited agent who represents both the buyer and the seller in a
transaction under ORS 696.815.
(g) The following statement to the consumer, “Whether you are a buyer or seller, you cannot make a licensee your
agent without the licensee’s knowledge and consent, and an agent cannot make you
a client without your knowledge and
consent.”
(6)
The Real Estate Agency will make available a sample of an initial
agency disclosure pamphlet that complies with section (5) of this rule on the
Agency’s website.
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Consumers: This
pamphlet describes the legal obligations of Oregon real estate licensees to
consumers. Real estate brokers and principal real estate brokers are required to
provide this information to you when they first contact you. A licensed real estate broker or principal broker need not provide
the pamphlet to a party who has, or may be reasonably assumed to have, received
a copy of the pamphlet from another broker.
This pamphlet is informational only. Neither the pamphlet nor its
delivery to you may be interpreted as evidence of intent to create an agency
relationship between you and a broker or a principal broker.
Real Estate Agency Relationships
An "agency" relationship is a
voluntary legal relationship in which a licensed real estate broker or principal
broker (the "agent") agrees to act on behalf of a buyer or a seller (the
"client") in a real estate transaction. Oregon law provides for three types of
agency relationships between real estate agents and their clients:
Seller's Agent -- Represents the seller only.
Buyer's Agent -- Represents the buyer only.
Disclosed Limited Agent -- Represents both the buyer and seller, or multiple buyers who
want to purchase the same property. This can be done only with the written
permission of all clients.
The actual agency relationships between the seller, buyer and their
agents in a real estate transaction must be acknowledged at the time an offer to
purchase is made. Please read this pamphlet carefully before entering into an
agency relationship with a real estate agent.
Definition of “Confidential
Information”
Generally, licensees must maintain
confidential information about their clients. “Confidential information” is
information communicated to a real estate licensee or the licensee’s agent by
the buyer or seller of one to four residential units regarding the real property
transaction, including but not limited to price, terms, financial qualifications
or motivation to buy or sell. “Confidential information” does not mean
information that:
(1)
The buyer instructs the licensee or the licensee’s agent to
disclose about the buyer to the seller, or the seller instructs the licensee or
the licensee’s agent to disclose about the seller to the buyer; and
(2)
The licensee or the licensee’s agent knows or should know failure
to disclose would constitute fraudulent
representation.
Duties and Responsibilities of a Seller’s Agent
Under a written listing agreement to
sell property, an agent represents only the seller unless the seller agrees in
writing to allow the agent to also represent the buyer.
An agent who represents only the
seller owes the following affirmative duties to the seller, the other parties
and the other parties’ agents involved in a real estate transaction:
(1)
To deal honestly and in good faith;
(2)
To present all written offers, notices and other communications to
and from the parties in a timely manner without regard to whether the property is subject to a contract for
sale or the buyer is already a party to a contract to purchase;
and
(3)
To disclose material facts known by the agent and not apparent or
readily ascertainable to a party.
A seller’s agent owes the seller the
following affirmative duties:
(1)
To exercise reasonable care and
diligence;
(2)
To account in a timely manner for money and property received from
or on behalf of the seller;
(3)
To be loyal to the seller by not taking action that is adverse or
detrimental to the seller’s interest in a transaction;
(4)
To disclose in a timely manner to the seller any conflict of
interest, existing or contemplated;
(5)
To advise the seller to seek expert advice on matters related to
the transaction that are beyond the agent's expertise;
(6)
To maintain confidential information from or about the seller
except under subpoena or court order, even after termination of the agency
relationship; and
(7)
Unless agreed otherwise in writing, to make a continuous, good
faith effort to find a buyer for the property, except that a seller's agent is
not required to seek additional offers to purchase the property while the
property is subject to a contract for sale.
None of these affirmative duties of an
agent may be waived, except (7). The affirmative duty listed in (7) can only be
waived by written agreement between seller and agent.
Under Oregon law, a seller's agent may
show properties owned by another seller to a prospective buyer and may list
competing properties for sale without breaching any affirmative duty to the
seller.
Unless agreed to in writing, an agent has no duty to investigate
matters that are outside the scope of the agent's expertise, including but not
limited to investigation of the condition of property, the
legal status of the title or the seller’s past conformance with
law.
Duties and Responsibilities of a Buyer’s Agent
An agent, other than the seller’s
agent, may agree to act as the buyer’s agent only. The
buyer’s agent is not representing the seller, even if the buyer’s agent is
receiving compensation for services rendered, either in full or in part, from
the seller or through the seller’s agent.
An agent who represents only the buyer
owes the following affirmative duties to the buyer, the other parties and the
other parties’ agents involved in a real estate transaction:
(1)
To deal honestly and in good faith;
(2)
To present all written offers, notices and other communications to
and from the parties in a timely manner without regard to whether the property
is subject to a contract for sale or the buyer is already a party to a contract
to purchase; and
(3)
To disclose material facts known by the agent and not apparent or
readily ascertainable to a party.
A buyer’s agent owes the buyer the
following affirmative duties:
(1)
To exercise reasonable care and
diligence;
(2)
To account in a timely manner for money and property received from
or on behalf of the buyer;
(3)
To be loyal to the buyer by not taking action that is adverse or
detrimental to the buyer’s interest in a transaction;
(4)
To disclose in a timely manner to the buyer any conflict of
interest, existing or contemplated;
(5)
To advise the buyer to seek expert advice on matters related to the
transaction that are beyond the agent's expertise;
(6)
To maintain confidential information from or about the buyer except
under subpoena or court order, even after termination of the agency
relationship; and
(7)
Unless agreed otherwise in writing, to make a continuous, good
faith effort to find property for the buyer, except that a buyer’s agent is not
required to seek additional properties for the buyer while the buyer is subject
to a contract for purchase.
None of these affirmative duties of an
agent may be waived, except (7). The affirmative duty listed in (7) can only be
waived by written agreement between buyer and agent.
Under Oregon law, a buyer’s agent may
show properties in which the buyer is interested to other prospective buyers
without breaching an affirmative duty to the
buyer.
Unless agreed to in writing, an agent has no duty to investigate
matters that are outside the scope of the agent's expertise, including but not
limited to investigation of the condition of property, the
legal status of the title or the seller’s past conformance with
law.
Duties and Responsibilities of an Agent Who Represents More than
One Client in a Transaction
One agent may represent both the
seller and the buyer in the same transaction, or multiple buyers who want to
purchase the same property, only under a written “Disclosed Limited Agency
Agreement” signed by the seller and buyer(s).
Disclosed Limited Agents have the
following duties to their clients:
(1)
To the seller, the duties listed above for a seller’s agent;
(2)
To the buyer, the duties listed above for a buyer’s agent;
and
(3)
To both buyer and seller, except with express written permission of
the respective person, the duty not to disclose to the other
person:
(a)
That the seller will accept a price lower or terms less favorable
than the listing price or terms;
(b)
That the buyer will pay a price greater or terms more favorable
than the offering price or terms; or
(c)
Confidential information as defined
above.
Unless agreed to in writing, an agent
has no duty to investigate matters that are outside the scope of the agent's
expertise.
When different agents associated with
the same principal broker (a real estate licensee who supervises other agents)
establish agency relationships with different parties to the same transaction,
only the principal broker will act as a Disclosed Limited Agent for both the
buyer and seller. The other agents continue to represent only the party with
whom the agents have already established an agency relationship unless all
parties agree otherwise in writing. The principal real estate broker and the
real estate licensees representing either seller or buyer shall owe the
following duties to the seller and buyer:
(1)
To disclose a conflict of interest in writing to all
parties;
(2)
To take no action that is adverse or detrimental to either party’s
interest in the transaction; and
(3)
To obey the lawful instructions of both parties.
No matter whom they represent, an
agent must disclose information the agent knows or should know that failure to
disclose would constitute fraudulent misrepresentation.
You
are encouraged to discuss the above information with the licensee delivering
this pamphlet to you. If you intend for that licensee, or any other Oregon real
estate licensee, to represent you as a Seller's Agent, Buyer's Agent, or
Disclosed Limited Agent, you should have a specific discussion with the agent
about the nature and scope of the agency relationship. Whether you are a buyer
or seller, you cannot make a licensee your agent without the licensee’s
knowledge and consent, and an agent cannot make you a client without your
knowledge and consent.