Relates to disclosure regarding dual agency in real estate relationships

BILL NUMBER:S7672A

Title of bill

An act to amend the real property law, in relation to disclosure regard- ing real estate agency relationship

Purpose or general idea of bill

The bill would amend the agency disclosure form to allow advanced consent to dual agency and require the use of agency disclosure forms in real estate transactions for condominium and cooperative housing.

Summary of specific provisions

Section 1: Real property law section 443, subdivision 1, is amended to add "associate real estate broker" and "real estate salesperson" to the definition of "agent".

The definition of residential real property is amended to include condo- miniums and cooperatives with respect to the provisions of this section.

New definitions for "advanced consent to dual agency" and "advanced consent to dual agency with designated sales agents" are also added to sec. 443 of real property law.

Section 2: The real property law section 443, subdivision 3, is amended to add a new paragraph (f) that allows sellers, landlords, buyers and tenants to consent in advance to dual agency.

Section 3: Real Property Law section 443(4)is amended to add correspond- ing changes to the agency disclosure form in statute.

Justification

A statutorily required agency disclosure form is used to provide consum- ers with information regarding their representation in a real estate transaction. "Dual Agent" is currently recognized in real estate license law as a valid form of agency relationship in which the buyer and seller are represented by the same real estate brokerage company.

This bill will allow consumers to select and allow a "dual agency" relationship in advance of it actually occurring. In many cases, buyers' agents will bring their clients to multiple properties in their search for an appropriate property for the buyer. They will often rum into situations where the seller is represented by the same brokerage company for whom the buyers' agent works. Currently, the property could not be shown until a new agency disclosure form was signed by the seller and buyer. This delays these activities and sometimes prohibits the property from being shown. The revised agency disclosure form would streamline this process by allowing consumers to provide advanced consent to this "dual agency" relationship. The selection by the buyer or seller of dual agency in advance of it occurring is completely optional.

The bill will also require real estate licensees to provide a written agency disclosure form when working with clients purchasing or selling condominiums or cooperatives. current law requires licensees in these types of transactions to provide verbal disclosure of the agency relationship. Requiring written disclosure in condo and coop trans- actions will ensure these consumers are afforded the same disclosure of agency representation information that is provided to buyers and sellers of residential real property.

Prior legislative history

None.

Fiscal implications

None.

Effective date

January 1, 2011