Table of Contents
Disclosure of Agency
Purpose of Agency Disclosure
When Disclosure Is Required
Agency Disclosure Form
Types of Disclosure
Seller Disclosure
Buyer Disclosure
Dual Agency Disclosure
Disclosure to Third Parties
Consequences of Failure to Disclose
Disclosure of Agency
California law requires real estate agents to disclose agency relationships in a timely manner.
Purpose of Agency Disclosure
Inform parties whom the agent represents
Avoid confusion and conflicts of interest
Ensure informed consent
Required by statute
When Disclosure Is Required
As soon as practicable
Before the principal enters into a contract
Prior to writing or presenting an offer, when possible
Agency Disclosure Form
Disclosure Regarding Real Estate Agency Relationships (AD)
Must be provided to:
Seller
Buyer
Requires written acknowledgment
Disclosure does not create agency by itself
Types of Disclosure
Seller Disclosure
Broker must disclose representation to seller
Explains seller’s agent duties
Signed at listing or as soon as practicable
Buyer Disclosure
Broker must disclose representation to buyer
Explains buyer’s agent duties
Signed prior to entering into an agreement
Dual Agency Disclosure
Must be disclosed to both buyer and seller
Requires informed written consent from both
Failure to disclose may void commission rights
Disclosure to Third Parties
Agents must disclose whom they represent
Required at first substantive contact
Applies to open houses and negotiations
Consequences of Failure to Disclose
Loss of commission
Disciplinary action by DRE
Civil liability
Possible rescission of contract