STATE OF WASHINGTON AGENCY DISCLOSURE

SECTION 1: DEFINITIONS

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

  1. “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.
  2. “Agent” means a licensee who has entered into an agency relationship with a buyer or seller.
  3. “Business opportunity” means and includes a business, business opportunity, and goodwill of an existing business, or any one or combination thereof.
  4. “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.
  5. “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.
  6. “Confidential information” means information from or concerning a principal of a licensee that:
    1. Was acquired by the licensee during the course of an agency relationship with the principal;
    2. The principal reasonably expects to be kept confidential;
    3. The principal has not disclosed or authorized to be disclosed to third parties;
    4. Would, if disclosed, operate to the detriment of the principal; and
    5. The principal personally would not be obligated to disclose to the other party.
  7. “Dual agent” means a licensee who has entered into an agency relationship with both the buyer and seller in the same transaction.
  8. “Licensee” means a real estate broker, associate real estate broker, or real estate salesperson, as those terms are defined in chapter 18.85 RCW.
  9. “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.
  10. “Principal” means a buyer or a seller who has entered into an agency relationship with a licensee.
  11. “Real estate brokerage services” means the rendering of services for which a real estate license is required under chapter 18.85 RCW.
  12. “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 writ- ten offer has been signed by at least one of the parties.
  13. “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.
  14. “Seller’s agent” means a licensee who has entered into an agency relationship with only the seller in a real estate transaction, and includes subagents engaged by a seller’s agent.
  15. “Subagent” 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 subagents.

SECTION 2: RELATIONSHIPS BETWEEN LICENSEES AND THE PUBLIC

  1. A licensee who performs real estate brokerage services for a buyer is a buyer’s agent unless the:
    1. Licensee has entered into a written agency agreement with the seller, in which case the licensee is a seller’s agent;
    2. Licensee has entered into a subagency agreement with the seller’s agent, in which case the licensee is a seller’s agent;
    3. Licensee has entered into a written agency agreement with both parties, in which case the licensee is a dual agent;
    4. Licensee is the seller or one of the sellers; or
    5. Parties agree otherwise in writing after the licensee has complied with section 3(1)(f) of this act.
  2. 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 section 6 of this act. 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.
  3. 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 3: DUTIES OF A LICENSEE GENERALLY

  1. 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:
    1. To exercise reasonable skill and care;
    2. To deal honestly and in good faith;
    3. 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;
    4. 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;
    5. To account in a timely manner for all money and property received from or on behalf of either party;
    6. To provide a pamphlet on the law of real estate agency in the form prescribed in section 13 of this act 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 section 2(1)(e), 4(1)(e), 5(1)(e), or 6(2)(e) or (f) of this act, whichever occurs earliest; and
    7. 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 trans- action 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 writing entitled “Agency Disclosure.”
  2. 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 complete- ness of any statement made by either party or by any source reasonably believed by the licensee to be reliable.

SECTION 4: DUTIES OF A SELLER’S AGENT

  1. Unless additional duties are agreed to in writing signed by a seller’s agent, the duties of a seller’s agent are limited to those set forth in section 3 of this act and the following, which may not be waived except as expressly set forth in (e) of this subsection:
    1. To be loyal to the seller by taking no action that is adverse or detrimental to the seller’s interest in a transaction;
    2. To timely disclose to the seller any conflicts of interest;
    3. To advise the seller to seek expert advice on matters relating to the transaction that are beyond the agent’s expertise;
    4. Not to disclose any confidential information from or about the seller, except under subpoena or court order, even after termination of the agency relationship; and
    5. Unless otherwise agreed to in writing after the seller’s agent has complied with section 3(1)(f) of this act, 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.
  2. (a) 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. (b) 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 5: DUTIES OF A BUYER’S AGENT

  1. 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 section 3 of this act and the following, which may not be waived except as expressly set forth in (e) of this subsection:
    1. To be loyal to the buyer by taking no action that is adverse or detrimental to the buyer’s inter- est in a transaction;
    2. To timely disclose to the buyer any conflicts of interest;
    3. To advise the buyer to seek expert advice on matters relating to the transaction that are beyond the agent’s expertise;
    4. Not to disclose any confidential information from or about the buyer, except under subpoena or court order, even after termination of the agency relationship; and
    5. Unless otherwise agreed to in writing after the buyer’s agent has complied with section 3(1)(f) of this act, to make a good faith and continuous ef- fort to find a property for the buyer; except that a buyer’s agent is not obligated to:
      1. seek additional properties to purchase while the buyer is a party to an existing contract to purchase; or
      2. show properties as to which there is no written agreement to pay compensation to the buyer’s agent.
  2. (a) 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. (b) 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 6: DUTIES OF A DUAL AGENT

  1. Notwithstanding any other provision 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 section 3(1)(f) of this act, which consent must include a statement of the terms of compensation.
  2. 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 section 3 of this act and the following, which may not be waived except as expressly set forth in (e) and (f) of this subsection:
    1. To take no action that is adverse or detrimental to either party’s interest in a transaction;
    2. To timely disclose to both parties any conflicts of interest;
    3. To advise both parties to seek expert advice on matters relating to the transaction that are beyond the dual agent’s expertise;
    4. Not to disclose any confidential information from or about either party, except under subpoena or court order, even after termination of the agency relationship;
    5. Unless otherwise agreed to in writing after the dual agent has complied with section 3(1)(f) of this act, 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; and
    6. Unless otherwise agreed to in writing after the dual agent has complied with section 3(l)(f) of this act, to make a good faith and continuous effort to find a property for the buyer; except that a dual agent is not obligated to:
      1. Seek additional properties to purchase while the buyer is a party to an existing contract to purchase; or
      2. show properties as to which there is no written agreement to pay compensation to the dual agent
  3. (a) 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. (b) 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.
  4. (a) 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. (b) 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 buyer or create a conflict of interest.

SECTION 7: DURATION OF AGENCY RELATIONSHIP

  1. 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:
    1. Completion of performance by the licensee;
    2. Expiration of the term agreed upon by the parties;
    3. Termination of the relationship by mutual agreement of the parties; or
    4. 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.
  2. Except as otherwise agreed to in writing, a licensee owes no further duty after termination of the agency relationship, other than the duties of:
    1. Accounting for all moneys and property received during the relationship; and
    2. Not disclosing confidential information.

SECTION 8: COMPENSATION

  1. 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.
  2. An agreement to pay or payment of compensation does not establish an agency relationship between the party who paid the compensation and the licensee.
  3. A seller may agree that a seller’s agent may share with another broker the compensation paid by the seller.
  4. A buyer may agree that a buyer’s agent may share with another broker the compensation paid by the buyer.
  5. 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.
  6. A buyer’s agent or dual agent may receive compensation based on the purchase price without breaching any duty to the buyer.
  7. 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 9: VICARIOUS LIABILITY

  1. A principal is not liable for an act, error, or omission by an agent or subagent of the principal arising out of an agency relationship:
    1. Unless the principal participated in or authorized the act, error, or omission; or
    2. Except to the extent that:
      1. The principal benefited from the act, error, or omission; and
      2. the court determines that it is highly probable that the claimant would be unable to enforce a judgment against the agent or subagent.
  2. A licensee is not liable for an act, error, or omission of a subagent under this chapter, unless the licensee participated in or authorized the act, error or omission. This subsection does not limit the liability of a real estate broker for an act, error, or omission by an associate real estate broker or real estate salesperson licensed to that broker.

SECTION 10: IMPUTED KNOWLEDGE AND NOTICE

  1. Unless otherwise agreed to in writing, a principal does not have knowledge or notice of any facts known by an agent or subagent of the principal that are not actually known by the principal.
  2. Unless otherwise agreed to in writing, a licensee does not have knowledge or notice of any facts known by a subagent 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 11: INTERPRETATION

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.

 

STATE OF OREGON AGENCY DISCLOSURE

REPRESENTATION OF BOTH BUYER AND SELLER

INITIAL AGENCY DISCLOSURE PAMPHLET

ORS 696.815(1) authorizes a real estate licensee to represent both the seller and the buyer in a real estate transaction under a disclosed limited agency agreement, provided there is full disclosure of the relationship under the agreement. Oregon Administrative Rules (OARs) adopted by the Agency provide the form and content of the disclosures and the related pamphlet. OAR 863-015-0215 is set forth below for the convenience of licensees. The material after the broken line can be copied and used as the required Initial Agency Disclosure Pamphlet.

863-015-0215

Initial Agency Disclosure Pamphlet

  1. An agent shall provide a copy of the Initial Agency Disclosure Pamphlet provided for in section (4) of this rule at first contact with each represented party to a real property transaction, including but not limited to contacts in-person, by telephone, over the Internet or World Wide Web, or by electronic mail, electronic bulletin board or a similar electronic method.
  2. An agent need not provide a copy of the Initial Agency Disclosure Pamphlet to a party who has, or may be reasonably assumed to have, already received a copy of the pamphlet from another agent.
  3. "First contact with a represented party" means contact with a person who is represented by a real estate licensee or can reasonably be assumed from the circumstances to be represented or seeking representation.
  4. The Initial Agency Disclosure Pamphlet shall be printed in substantially the following form:

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INITIAL AGENCY DISCLOSURE PAMPHLET (OAR 863-015-215(4))

This pamphlet describes agency relationships and the duties and responsibilities of real estate licensees in Oregon. This pamphlet is informational only and neither the pamphlet nor its delivery to you may be construed to be evidence of intent to create an agency relationship.

Real Estate Agency Relationships

An "agency" relationship is a voluntary legal relationship in which a real estate licensee (the "agent") agrees to act on behalf of a buyer or a seller (the "client") in a real estate transaction. Oregon law provides for three types of agency relationships between real estate agents and their clients:

Seller's Agent -- Represents the seller only;

Buyer's Agent -- Represents the buyer only;

Disclosed Limited Agent -- Represents both the buyer and seller, or multiple buyers who want to purchase the same property. This can be done only with the written permission of both clients.

The actual agency relationships between the seller, buyer and their agents in a real estate transaction must be acknowledged at the time an offer to purchase is made. Please read this pamphlet carefully before entering into an agency relationship with a real estate agent.

Duties and Responsibilities of an Agent Who Represents Only the Seller or Only the Buyer

Under a written listing agreement to sell property, an agent represents only the seller unless the seller agrees in writing to allow the agent to also represent the buyer. An agent who agrees to represent a buyer acts only as the buyer's agent unless the buyer agrees in writing to allow the agent to also represent the seller. An agent who represents only the seller or only the buyer owes the following affirmative duties to their client, other parties and their agents involved in a real estate transaction:

  1. To exercise reasonable care and diligence;
  2. To deal honestly and in good faith;
  3. To present all written offers, notices and other communications in a timely manner whether or not the seller's property is subject to a contract for sale or the buyer is already a party to a contract to purchase;
  4. To disclose material facts known by the agent and not apparent or readily ascertainable to a party;
  5. To account in a timely manner for money and property received from or on behalf of the client;
  6. To be loyal to their client by not taking action that is adverse or detrimental to the client's interest in a transaction;
  7. To disclose in a timely manner to the client any conflict of interest, existing or contemplated;
  8. To advise the client to seek expert advice on matters related to the transactions that are beyond the agent's expertise;
  9. To maintain confidential information from or about the client except under subpoena or court order, even after termination of the agency relationship; and
  10. When representing a seller, to make a continuous, good faith effort to find a buyer for the property, except that a seller's agent is not required to seek additional offers to purchase the property while the property is subject to a contract for sale. When representing a buyer, to make a continuous, good faith effort to find property for the buyer, except that a buyer's agent is not required to seek additional properties for the buyer while the buyer is subject to a contract for purchase or to show properties for which there is no written agreement to pay compensation to the buyer's agent.

None of these affirmative duties of an agent may be waived, except #10, which can only be waived by written agreement between client and agent.

Under Oregon law, a seller's agent may show properties owned by another seller to a prospective buyer and may list competing properties for sale without breaching any affirmative duty to the seller. Similarly, a buyer's agent may show properties in which the buyer is interested to other prospective buyers without breaching any affirmative duty to the buyer.

Unless agreed to in writing, an agent has no duty to investigate matters that are outside the scope of the agent's expertise.

Duties and Responsibilities of an Agent Who Represents More than One Client in a Transaction

One agent may represent both the seller and the buyer in the same transaction, or multiple buyers who want to purchase the same property only under a written "Disclosed Limited Agency" agreement, signed by the seller, buyer(s) and their agent.

When different agents associated with the same real estate firm establish agency relationships with different parties to the same transaction, only the principal broker (the broker who supervises the other agents) will act as a Disclosed Limited Agent for both the buyer and seller. The other agents continue to represent only the party with whom the agent already has an established agency relationship unless all parties agree otherwise in writing. The supervising principal broker and the agents representing either the seller or the buyer have the following duties to their clients:

  1. To disclose a conflict of interest in writing to all parties;
  2. To take no action that is adverse or detrimental to either party's interest in the
    transaction; and
  3. To obey the lawful instruction of both parties.

An agent acting under a Disclosed Limited Agency agreement has the same duties to the client as when representing only a seller or only a buyer, except that the agent may not, without written permission, disclose any of the following:

  1. That the seller will accept a lower price or less favorable terms than the listing price or terms;
  2. That the buyer will pay a greater price or more favorable terms than the offering price or terms; or
  3. In transactions involving one-to-four residential units only, information regarding the real property transaction including, but not limited to, price, terms, financial qualifications or motivation to buy or sell.


No matter whom they represent, an agent must disclose information the agent knows or should know that failure to disclose would constitute fraudulent misrepresentation. Unless agreed to in writing, an agent acting under a Disclosed Limited Agency agreement has no duty to investigate matters that are outside the scope of the agent's expertise.

You are encouraged to discuss the above information with the agent delivering this pamphlet to you. If you intend for that agent, or any other Oregon real estate agent, to represent you as a Seller's Agent, Buyer's Agent, or Disclosed Limited Agent, you should have a specific discussion with him/her about the nature and scope of the agency relationship. Whether you are a buyer or seller, you cannot make a licensee your agent without their knowledge and consent, and an agent cannot make you their client without your knowledge and consent.

 

Updated: 2017-09-14