AGENCY LAW
CHANGES:
WHAT DO THEY MEAN FOR YOU AND
YOUR AGENTS?
BEFORE
WE BEGIN

Audience members will not have
speaking capabilities on this call

However, we encourage all attendees to
submit questions through the question
field on the Go To Meeting control panel

There will be a Q&A portion at the end of
the presentation

All questions submitted through the Go
To Meeting control panel are private;
they cannot be seen by other audience
members
WHAT WE’LL COVER
•
the upcoming changes to the current agency law;
•
a review of the standard disclosure forms and other
supplemental forms that will be available later this
month;
•
an outline of resources that will be made available to
brokers and agents to inform and help them adapt to
the changes;
•
a few FAQs we’ve already been hearing around the
state; and
•
a Q&A period for additional questions you may have
AGENCY
Changes to Virginia agency law take effect July
1, 2012.
In the coming months, VAR will provide a variety
of resources to help you adapt to the revisions,
including videos, webcasts, articles, new forms,
and classes.
WHY
1.
INFORM THE CONSUMER.
The law is to make sure consumers are
fully informed about the real estate
services they’ll receive and the nature
of the relationship with the licensee.
2.
MITIGATE REALTOR® LIABILITY.
The law is designed to protect licensees
by making sure full disclosure is
provided and the nature of brokerage
relationship is reduced to writing. It’s to
eliminate much of the consumer
confusion that can come back and bite
the licensee.
3.
DISCOURAGE OPPORTUNISITIC
DUAL AGENCY.
The law is intended to make sure that
licensees who practice dual agency are
fully informing consumers about the
risky nature of that relationship.
THE CHANGE TO
THE LAW?
AGENCY LAW
CHANGES
1. GET IT IN
WRITING
All licensees must have written brokerage
agreements with consumers they
represent. These agreements must, at a
minimum:

Provide a list of services that the agent
will provide;

Provide a schedule of fees that will be
associated with service, and when
payable; and

Provide a definite termination date.
INDEPENDENT CONTRACTOR
means a real estate licensee who:
enters into a brokerage relationship based upon a brokerage agreement that
specifically states that the licensee is acting as an independent contractor
and not as an agent;
• has obligations agreed to by the parties in the brokerage agreement;
• is required to
•
•
maintain client confidentiality;
•
exercise ordinary care;
•
account for a client’s money and property;
•
disclose material facts to client regarding the property
and/or the transaction, and disclose material adverse
facts/defective drywall to prospective purchasers and
tenants;
•
treat all parties honestly; and
•
disclose the brokerage relationship to all parties; but
does not have any other duties of a standard agent under Sections 54.1-2131
through 54.1-2135 (marketing, negotiating, etc.)
•
AGENCY LAW
CHANGES
2.
ENHANCED
DISCLOSURES
FOR DUAL
AGENCY
Dual agents and representatives must
provide enhanced disclosure of
limitations on what dual agents can and
cannot do for parties to a transaction.
There are exceptions for situations where
existing clients come together in a
common transaction, and for
independent contractors.
AGENCY LAW
CHANGES
3.
MANDATORY
AGENCY
COURSE
Licensees must take a three-hour course
on the provisions of the agency statute
and the changes made in the legislation.
You may exempt yourself from this only if
you agree in writing that you will not
practice residential standard agency
during your license term.
AGENCY COURSE TIMING
Agents must take a three-hour course on the provisions of the agency
statute and the changes made in the legislation.
This means that if your current license expires after July 1, 2012, you may
take the three-hour agency course at any time, beginning right now. In fact,
if your license expires in July 2012, you will need the course very quickly.
However, if your license expires in February through June of 2012, you
should wait to take the course until after you have renewed your license.
You may take the course now, but you will need to take it again (for credit) in
your next license cycle.
NEW AGENCY DISCLOSURE FORMS
• DISCLOSURE OF DUAL AGENCY OR REPRESENTATION –
RESIDENTIAL
• DISCLOSURE OF DUAL AGENCY OR REPRESENTATION –
COMMERCIAL
• DISCLOSURE OF BROKERAGE RELATIONSHIP FOR
UNREPRESENTED PARTIES
• DISCLOSURE OF DESIGNATED AGENCY OR REPRESENTATION
In addition to these new required forms, we’ve also created
several additional resources to help you adapt to the
changes:
• INDEPENDENT CONTRACTOR LISTING AGREEMENT
• EXCLUSIVE BUYER BROKER AGREEMENT (REDUCED IN SIZE)
• NON-EXCLUSIVE BUYER BROKER AGREEMENT (REDUCED IN SIZE)
• TWO CONSUMER INFORMATION PIECES:
• DISCLOSURE OF BROKERAGE RELATIONSHIP INFORMATION FORM
• CONSUMER INFORMATION REGARDING WRITTEN BUYER BROKER
AGREEMENTS
DISCLOSURES OF
DUAL AGENCY OR
REPRESENTATION
RESIDENTIAL
2 PAGES
WWW.VAREALTOR.COM/STANDARDFORMS
DISCLOSURES OF
DUAL AGENCY OR
REPRESENTATION
COMMERCIAL
1 PAGE
WWW.VAREALTOR.COM/STANDARDFORMS
DISCLOSURE OF
BROKERAGE
RELATIONSHIP
FOR UNREPRESENTED PARTIES
1 PAGE
WWW.VAREALTOR.COM/STANDARDFORMS
DISCLOSURE OF
DESIGNATED
AGENCY
OR REPRESENTATION
1 PAGE
WWW.VAREALTOR.COM/STANDARDFORMS
INDEPENDENT
CONTRACTOR
AGREEMENT
5 PAGES
WWW.VAREALTOR.COM/STANDARDFORMS
BUYER
BROKER
AGREEMENT
AVAILABLE IN EXCLUSIVE
& NON-EXCLUSIVE
2 PAGES
WWW.VAREALTOR.COM/STANDARDFORMS
SHORT
BUYER
BROKER
AGREEMENT
NON-EXCLUSIVE ONLY
1 PAGE
WWW.VAREALTOR.COM/STANDARDFORMS
YOUR
REALTOR’S
ROLE
2-PAGE PIECE DESIGNED TO
OUTLINE
1.WHY
CONSUMERS SHOULD USE
A REALTOR®
2.WHY A BROKERAGE AGREEMENT
IS NECESSARY
WWW.VAREALTOR.COM/REALTORSROLE
RESOURCES FOR
BROKERS & AGENTS
WEBSITE
MAGAZINE
EDUCATION
STANDARD FORMS
COURSE CALENDAR
VIDEOS
HOTLINE Q&A
WEBINARS
VAREALTOR.COM/
AGENCY
VAREALTOR.COM/
AGENCY
CLASS CALENDAR CURRENTLY
SHOWS MORE THAN 120 AGENCY
COURSE OFFERINGS ACROSS THE
STATE
WWW.VAREALTOR.COM/AGENCY
COMMONWEALTH
MAGAZINE
APRIL: AGENCY PRIMER
JUNE: AGENCY CHANGE TUTORIAL
WWW.VAREALTOR.COM/COMMONWEALTH
DO I HAVE TO HAVE A
Yes. But…
WRITTEN
AGREEMENT

It doesn’t have to be exclusive
TO SHOW SOMEONE
A HOUSE THAT IS
NOT MY LISTING?

It doesn’t have to be long-term

It doesn’t have to be for compensation

It doesn’t have to be an agency
relationship
WHEN
DO YOU NEED TO
DISCLOSE YOUR
BROKERAGE
RELATIONSHIP?
The big questions is:
Is the consumer already represented?
If no:

“Substantive” discussion

Specific property

Actual prospect who is not your client
and who is not represented by any other
licensee
WHAT IS
SUBSTANTIVE?

Pricing questions

Motivation

Repairs/property condition
QUESTIONS & ANSWERS
ERIKA@VAREALTOR.COM