Disclosure of Acting as Principal or Other Interest

Licensees must disclose when they have a personal interest in a transaction.

A licensee is acting as a principal when buying, selling, or leasing property for themselves.

• Must disclose licensed status
• Must disclose ownership interest
• Disclosure must be made to all parties
• Disclosure must be in writing
• Applies whether or not a commission is received

A licensee must disclose any interest that could influence their judgment.

• Ownership interest (direct or indirect)
• Option to buy or sell
• Financial interest in the property or transaction
• Relationship with a party that creates a conflict of interest

• As soon as possible
• Before entering into a binding agreement
• Prior to acceptance of an offer

• Prevent fraud and misrepresentation
• Allow informed consent
• Protect the public
• Maintain fiduciary duty of loyalty

• Disciplinary action by the DRE
• Civil liability
• Possible rescission of contract
• Loss of commission