REALTOR® Magazine Online: Key Disclosure Issues to Remember

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Risk management
Agency Disclosure

Three Lines of Defense Against Risk

Keeping Risks Under Control

Controlling Transaction Risks

Agency Disclosure

Avoiding Antitrust Risks

Minimizing Liability from Contracts

Fair Housing Risks

Controlling Personnel Risks

Communications Policies to Minimize Risks

Insuring Against Risks

More Resources: Controlling Business Risks

Code of Ethics: Controlling Business Risks

An agency disclosure form is required in many states for all residential transactions and is probably advisable whether or not it's required by law.

TIP: If your state doesn’t have a standard agency disclosure form, develop one at the same time you create your agency policy and have it reviewed by an attorney.

Key Disclosure Issues to Remember

Disclosure must be timely. Be sure that disclosure is made when the listing agreement or buyer’s representation agreement is signed or at a time set forth in your state’s statute.

TIP: If a sales associate is working with buyers as customers, be sure that a disclosure of the fact that the associates is the seller’s agent or subagent is made to the buyers before any properties are shown.

Disclosure must be meaningful. Assist salespeople by providing clear written explanations of what agency relationships mean. Some states provide standardized disclosure language you can use.

Disclosure must be made to all parties, including other brokers.

TIP: In most cases, buyers and sellers are not legally required to sign an agency disclosure form. If a client or customer refuses to sign, have the sales associate indicate on the form the date it was presented and that the person refused to sign. —Gregory McCClelland, legal counsel, Michigan Association of REALTORS^®

Advanced Tip
If you receive an offer from a cooperating licensee acting as a subagent, be sure that an acknowledged agency disclosure form signed by the buyer accompanies it. —Scott Taylor, “Office Policy Essential to Compliance with Agency Disclosure,"Oregon REALTOR^®, March/April 1994

2 Disclosure Tests: You Be the Judge >

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