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Who
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The Law Of Agency
SECTION
ONE 18.86.010. Definitions.
Unless the context clearly requires otherwise, the definitions in
this section apply throughout this chapter.
"Agency
relationship"
means the agency relationship created under this chapter or by written
agreement between a licensee and a buyer and/or seller relating to the
performance of real estate brokerage services by the licensee.
"Agent"
means a licensee who has entered into an agency relationship with
a buyer or seller.
"Business opportunity" means
and includes a business, business opportunity, and goodwill of an existing
business, or any one or combination thereof.
"Buyer" means an actual
or prospective purchaser in a real estate transaction, or an actual or
prospective tenant in a real estate rental or lease transaction, as applicable.
"Buyer's agent" means a
licensee who has entered into an agency relationship with only the buyer
in a real estate transaction, and includes sub-agents engaged by a buyer's
agent.
"Confidential information"
means information from or concerning a principal of a licensee
that was acquired by the licensee during the course of an agency relationship
with the principal, the principal reasonably expects to be kept confidential,
the principal has not disclosed or authorized to be disclosed to third
parties, would, if disclosed, operate to the detriment of the principal,
and the principal personally would not be obligated to disclose to the
other party.
"Dual agent" means a licensee
who has entered into an agency relationship with both the buyer and seller
in the same transaction.
"Licensee" means a real
estate broker, associate real estate broker, or real estate salesperson,
as those terms are defined in Chapter 18.85 RCW.
"Material fact" means information
that substantially adversely affects the value of the property or a party's
ability to perform its obligations in a real estate transaction, or operates
to materially impair or defeat the purpose of the transaction. The fact
or suspicion that the property, or any neighboring property, is or was
the site of a murder, suicide or other death, rape or other sex crime,
assault or other violent crime, robbery or burglary, illegal drug activity,
gang-related activity, political or religious activity, or other act,
occurrence, or use not adversely affecting the physical condition of or
title to the property is not a material fact.
"Principal" means a buyer
or a seller who has entered into an agency relationship with a licensee.
"Real estate brokerage
services" means
the rendering of services for which a real estate license is required
under Chapter 18.85 RCW.
"Real estate transaction"
or "transaction" means an
actual or prospective transaction involving a purchase, sale, option,
or exchange of any interest in real property or a business opportunity,
or a lease or rental of real property. For purposes of this chapter, a
prospective transaction does not exist until a written offer has been
signed by at least one of the parties.
"Seller" means an actual
or prospective seller in a real estate transaction, or an actual or prospective
landlord in a real estate rental or lease transaction, as applicable.
"Seller's agent" means a
licensee who has entered into an agency relationship with only the seller
in a real estate transaction, and includes sub-agents engaged by a seller's
agent.
"Sub-agent" means a licensee
who is engaged to act on behalf of a principal by the principal's agent
where the principal has authorized the agent in writing to appoint sub-agents.
SECTION
TWO 18.86.020. Agency Relationship. A licensee who performs
real estate brokerage services for a buyer is a buyer's agent unless the:
- Licensee
has entered into a written agency agreement with the seller, in which
case the licensee is a seller's agent
- Licensee
has entered into a sub-agency agreement with the seller's agent, in
which case the licensee is a seller's agent
- Licensee
has entered into a written agency agreement with both parties, in which
case the licensee is a dual agent
- Licensee
is the seller or one of the sellers or
Parties agree otherwise in writing after the licensee has complied with
RCW 18.86.030(1)(f).
In a transaction
in which different licensees affiliated with the same broker represent
different parties, the broker is a dual agent, and must obtain the written
consent of both parties as required under RCW 18.86.060. In such a case,
each licensee shall solely represent the party with whom the licensee
has an agency relationship, unless all parties agree in writing that both
licensees are dual agents.
A licensee
may work with a party in separate transactions pursuant to different relationships,
including, but not limited to, representing a party in one transaction
and at the same time not representing that party in a different transaction
involving that party, if the licensee complies with this chapter in establishing
the relationships for each transaction.
SECTION
THREE 18.86.030. Duties of a Licensee. Regardless of whether
the licensee is an agent, a licensee owes to all parties to whom the licensee
renders real estate brokerage services the following duties, which may
not be waived:
- To exercise
reasonable skill and care
- To deal
honestly and in good faith
- To present
all written offers, written notices and other written communications
to and from either party in a timely manner, regardless of whether the
property is subject to an existing contract for sale or the buyer is
already a party to an existing contract to purchase
- To disclose
all existing material facts known by the licensee and not apparent or
readily ascertainable to a party; provided that this subsection shall
not be construed to imply any duty to investigate matters that the licensee
has not agreed to investigate
- To account
in a timely manner for all money and property received from or on behalf
of either party
- To provide
a pamphlet on the law of real estate agency in the form prescribed in
RCW 18.86.120 to all parties to whom the licensee renders real estate
brokerage services, before the party signs an agency agreement with
the licensee, signs an offer in a real estate transaction handled by
the licensee, consents to dual agency, or waives any rights, under RCW
18.86.020(1)(e), 18.86.040(1)(e), 18.86.050(1)(e), or 18.86.060(2)(e)
or (f) whichever occurs earliest
- To disclose
in writing to all parties to whom the licensee renders real estate brokerage
services, before the party signs an offer in a real estate transaction
handled by the licensee, whether the licensee represents the buyer,
the seller, both parties, or neither party. The disclosure shall be
set forth in a separate paragraph entitled "Agency Disclosure"
in the agreement between the buyer and seller or in a separate written
document entitled "Agency Disclosure."
Unless
otherwise agreed, a licensee owes no duty to conduct an independent inspection
of the property or to conduct an independent investigation of either party's
financial condition, and owes no duty to independently verify the accuracy
or completeness of any statement made by either party or by any source
reasonably believed by the licensee to be reliable.
SECTION FOUR 18.86.040. Seller's Agent - Duties.
Unless additional duties are agreed to in writing and signed by
a seller's agent, the duties of a seller's agent are limited to those
set forth in RCW 18.86.030 and the following, which may not be waived
except as expressly set forth in (e) of this subsection
- To be
loyal to the seller by taking no action that is adverse or detrimental
to the seller's interest in a transaction
- To timely
disclose to the seller any conflicts of interest
- To advise
the seller to seek expert advice on matters relating to the transaction
that are beyond the agent's expertise
- Not
to disclose any confidential information from or about the seller, except
under subpoena or court order, even after termination of the agency
relationship
- Unless
otherwise agreed to in writing after the seller's agent has complied
with RCW 18.86.030(1)(f), to make a good faith and continuous effort
to find a buyer for the property; except that a seller's agent is not
obligated to seek additional offers to purchase the property while the
property is subject to an existing contract for sale.
The showing
of properties not owned by the seller to prospective buyers or the listing
of competing properties for sale by a seller's agent does not in and of
itself breach the duty of loyalty to the seller or create a conflict of
interest.
The representation
of more than one seller by different licensees affiliated with the same
broker in competing transactions involving the same buyer does not in
and of itself breach the duty of loyalty to the sellers or create a conflict
of interest.
SECTION
FIVE 18.86.050. Buyer's Agent - Duties. Unless additional duties
are agreed to in writing signed by a buyer's agent, the duties of a buyer's
agent are limited to those set forth in RCW 18.86.030 and the following,
which may not be waived except as expressly set forth in (e) of this subsection:
- To be
loyal to the buyer by taking no action that is adverse or detrimental
to the buyer's interest in a transaction
- To timely
disclose to the buyer any conflicts of interest
- To advise
the buyer to seek expert advice on matters relating to the transaction
that are beyond the agent's expertise
- Not
to disclose any confidential information from or about the buyer, except
under subpoena or court order, even after termination of the agency
relationship
- Unless
otherwise agreed to in writing after the buyer's agent has complied
with RCW 18.86.030(1)(f) of this act, to make a good faith and continuous
effort to find a property for the buyer; except that a buyer's agent
is not obligated to: (i) Seek additional properties to purchase while
the buyer is a party to an existing contract to purchase; or (ii) show
properties as to which there is no written agreement to pay compensation
to the buyer's agent. The showing of property in which a buyer is interested
to other prospective buyers by a buyer's agent does not in and of itself
breach the duty of loyalty to the buyer or create a conflict of interest.
The representation
of more than one buyer by different licensees affiliated with the same
broker in competing transactions involving the same property does not
in and of itself breach the duty of loyalty to the buyers or create a
conflict of interest.
SECTION
SIX 18.86.060. Dual Agent - Duties. Notwithstanding any other
provisions of this chapter, a licensee may act as a dual agent only with
the written consent of both parties to the transaction after the dual
agent has complied with RCW 18.86.030 (1) (f), which consent must include
a statement of the terms of compensation.
Unless additional duties are agreed to in writing signed by a dual agent,
the duties of a dual agent are limited to those set forth in RCW 18.86.030
and the following, which may not be waived except as expressly set forth
in (e) and (f) of this subsection:
- To take
no action that is adverse or detrimental to either party's interest
in a transaction
- To timely
disclose to both parties any conflicts of interest
- To advise
both parties to seek expert advice on matters relating to the transaction
that are beyond the dual agent's expertise
- Not
to disclose any confidential information from or about either party,
except under subpoena or court order, even after termination of the
agency relationship
- Unless
otherwise agreed to in writing after the dual agent has complied with
RCW 18.86.030 (1)(f), to make a good faith and continuous effort to
find a buyer for the property; except that a dual agent is not obligated
to seek additional offers to purchase the property while the property
is subject to an existing contract for sale
- Unless
otherwise agreed to in writing after the dual agent has complied with
RCW 18.86.030 (1)(f), to make a good faith and continuous effort to
find a property for the buyer; except that a dual agent is not obligated
to: (i) Seek additional properties to purchase while the buyer is a
party to an existing contract to purchase; or (ii) show properties as
to which there is no written agreement to pay compensation to the dual
agent.
The showing
of properties not owned by the seller to prospective buyers or the listing
of competing properties for sale by a dual agent does not in and of itself
constitute action that is adverse or detrimental to the seller or create
a conflict of interest.
The representation
of more than one seller by different licensees affiliated with the same
broker in competing transactions involving the same buyer does not in
and of itself constitute action that is adverse or detrimental to the
sellers or create a conflict of interest.
The showing
of property in which a buyer is interested to other prospective buyers
or the presentation of additional offers to purchase property while the
property is subject to a transaction by a dual agent does not in and of
itself constitute action that is adverse or detrimental to the buyer or
create a conflict of interest.
The representation
of more than one buyer by different licensees affiliated with the same
broker in competing transactions involving the same property does not
in and of itself constitute action that is adverse or detrimental to the
buyers or create a conflict of interest.
SECTION SEVEN 18.86.070. Duration of Agency Relationship.
The agency relationships set forth in this chapter commence
at the time that the licensee undertakes to provide real estate brokerage
services to a principal and continue until the earliest of the following:
- Completion
of performance by the licensee
- Expiration
of the term agreed upon by the parties
- Termination
of the relationship by mutual agreement of the parties
- Termination
of the relationship by notice from either party to the other. However,
such a termination does not affect the contractual rights of either
party. Except as otherwise agreed to in writing, a licensee owes no
further duty after termination of the agency relationship, other than
the duties of: Accounting for all moneys and property received during
the relationship; and Not disclosing confidential information
SECTION
EIGHT 18.86.080. Compensation. In any real estate transaction,
the broker's compensation may be paid by the seller, the buyer, a third
party, or by sharing the compensation between brokers. An agreement to
pay or payment of compensation does not establish an agency relationship
between the party who paid the compensation and the licensee. A seller
may agree that a seller's agent may share with another broker the compensation
paid by the seller. A buyer may agree that a buyer's agent may share with
another broker the compensation paid by the buyer. A broker may be compensated
by more than one party for real estate brokerage services in a real estate
transaction, if those parties consent in writing at or before the time
of signing an offer in the transaction. A buyer's agent or dual agent
may receive compensation based on the purchase price without breaching
any duty to the buyer. Nothing contained in this chapter negates the requirement
that an agreement authorizing or employing a licensee to sell or purchase
real estate for compensation or a commission be in writing and signed
by the seller or buyer.
SECTION
NINE 18.86.080. Compensation. In any real estate transaction,
the broker's compensation may be paid by the seller, the buyer, a third
party, or by sharing the compensation between brokers. An agreement to
pay or payment of compensation does not establish an agency relationship
between the party who paid the compensation and the licensee. A seller
may agree that a seller's agent may share with another broker the compensation
paid by the seller. A buyer may agree that a buyer's agent may share with
another broker the compensation paid by the buyer. A broker may be compensated
by more than one party for real estate brokerage services in a real estate
transaction, if those parties consent in writing at or before the time
of signing an offer in the transaction. A buyer's agent or dual agent
may receive compensation based on the purchase price without breaching
any duty to the buyer. Nothing contained in this chapter negates the requirement
that an agreement authorizing or employing a licensee to sell or purchase
real estate for compensation or a commission be in writing and signed
by the seller or buyer.
SECTION
TEN 18.86.100. Imputed Knowledge and Notice. Unless otherwise
agreed to in writing, a principal does not have knowledge or notice of
any facts known by an agent or sub-agent of the principal that are not
actually known by the principal. Unless otherwise agreed to in writing,
a licensee does not have knowledge or notice of any facts known by a sub-agent
that are not actually known by the licensee. This subsection does not
limit the knowledge imputed to a real estate broker of any facts known
by an associate real estate broker or real estate salesperson licensed
to such broker.
SECTION
ELEVEN 18.86.110. Application. This
chapter supersedes only the duties of the parties under the common law,
including fiduciary duties of an agent to a principal, to the extent inconsistent
with this chapter. The common law continues to apply to the parties in
all other respects. This chapter does not affect the duties of a licensee
while engaging in the authorized or unauthorized practice of law as determined
by the courts of this state. This chapter shall be construed broadly.
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