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Real Property Law Section 443

Brokers owe duties of loyalty to their clients.  However, what happens when the same broker or their company represents both the buyer and the seller?  Whose side is that broker really on?  A new law, effective now, attempts to address this.
This law, Real Property Law Section 443, requires that the buyer or seller sign a disclosure form which essentially acknowledges whether the broker is acting on behalf of the buyer, seller or both.
If the broker is representing only one of the parties then that broker owes a duty of loyalty to just that one party. However, if the broker is representing both sides of the deal then neither side can expect the broker’s undivided loyalty.
But it gets more complicated than that since in a situation where the broker represents both sides, each side and the broker can pick someone to be a “designated sales agent” to work under the supervision of the broker. At first it may seem that the designated sales agent for the buyer and or seller are independent but in reality they also cannot provide undivided loyalty to the side they are designated to help.
We will have to wait and see how this pans out but the thing for buyers or sellers to remember is that if they want their broker’s undivided loyalty, they should not enter into a dual agency relationship. However, if either a seller or broker does not agree to a dual agency relationship that might restrict the broker from working with brokers in his or her company.

Category: News, The Brokers World One comment »

One Response to “Real Property Law Section 443”

  1. information technology

    Valuable info. Lucky me I found your site by accident, I bookmarked it.

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