Legal Hotline

By Chris Darby, Tom Muldoon, and John Nalls of Counselors Title, LLC, and Pardo & Drazin, LLC, General Counsel

QUESTION: I have switched brokerages. My former brokerage has an active buyer brokerage agreement in the District of Columbia with a client who was formerly working with me and wants to do so again at my new brokerage. My former broker indicates that the buyer brokerage agreement is active with them. They wish to enforce the seller’s obligations under the presently existing agreement. Can anything be done in order for the seller to sign a buyer brokerage agreement with my new brokerage?

ANSWER: An exclusive listing or buyer brokerage agreement with a client is the property of the broker with whom it is made, not any individual agents of that broker. Every agent (and broker) also has an ethical obligation to not interfere with another’s existing exclusive brokerage agreement. Thus, when an agent changes brokers, they do not have the right to have the client change with them.

Unlike in Maryland, which allows for either party to an agency agreement to terminate the agency relationship (but not the contractual obligations), District of Columbia agency law requires that both parties (broker and client) to an agency agreement must consent to terminate it.

Accordingly, in order to terminate the brokerage rela tionship under the buyer broker agreement, both the buyer and the former broker would have to execute a Termination of Buyer Agency Agreement (GCAAR Form 1348). You would then be free to have the buyer execute a buyer brokerage agreement with your new broker.

QUESTION: I have sellers who are married, but the home’s deed is only in one of their names. Should I still have both of them sign disclosures and the sales contract?

ANSWER: If only one of the individuals is on the deed, then they would be the only one to sign the contract, disclosures, closing documents, and the like. Despite being married, the other spouse would have no ownership interest in the property unless they are included on the deed.

QUESTION: I need clarification/guidance on sellers’ responsibilities for radon disclosure in Montgomery County. The buyers requested a copy of the radon results, but were informed there is no report to provide. The seller’s agent said that since the buyers did not request a radon inspection, the sellers did not need to provide one.

ANSWER: Effective October 1, 2016, Montgomery County enacted Section 40-13C of the Montgomery County Code, requiring all single family homes to be tested for radon before the sale of the home can be completed. The required test must be conducted less than one (1) year before the settlement date. The seller must either perform the test or permit the buyer to perform the test, with both parties receiving a copy of the results of the radon test.

QUESTION: Are REALTORS ® able to legally provide non-REALTORS ® with finder’s fees or referral fees in DC, Maryland, or Virginia? If so, what is the maximum they are able to provide and is there a protocol for providing a referral to non-REALTORS ® ?

ANSWER: Brokers are prohibited, per agency and licensure laws, from sharing commissions with non-licensed individuals. Moreover, the payment of anything of value with the expectation or anticipation of future business would be a Real Estate Settlement Procedures Act (RESPA) violation.

We must however, provide you with a caveat on this question as well: As GCAAR is not the appropriate association for Virginia, we cannot provide advice outside of the GCAAR purview.

DISCLAIMER: The answers provided here are the opinion of the authors, are for informational purposes, and are only for GCAAR members. Neither Counselors Title, LLC, nor Pardo & Drazin, LLC, is providing legal advice, but rather providing a general statement of law. No lawyer/client relationship is – or will be – established as a result of this material. Readers are encouraged to retain their own counsel for their specific questions. Answers may have been edited for formatting purposes.