5 minute read
Legal Quiz
from Insight | May 2018
by NC REALTORS®
BY: WILL MARTIN, GENERAL COUNSEL
Access all of our weekly Q&As by signing in to ncrealtors.org/resolve, locating the Resolve Library and searching by question title.
Q In oral buyer agency, do you have to get something in writing before you can show a buyer any of your firm’s listings?
A Technically, no, but it’s a very good idea to confirm the existence and terms of an oral buyer agency agreement in writing, including the buyer’s permission for you to act as a dual agent. A sample letter confirming the establishment and terms of an oral buyer agency relationship is available on the NC REALTORS® website. Members may modify it to create their own version of such a letter or email. (10/5/17)
Q If a buyer pays an Additional Earnest Money Deposit (EMD) with a personal check, can the seller terminate the contract, and if so, when?
A buyer’s failure to pay an Additional EMD in a form of payment specified in the Offer to Purchase and Contract prior to the expiration of the date inserted in the blank in paragraph 1(d) is a breach of the contract that likely would give the seller the right to terminate the contract immediately following the agreed date. A personal check is not a permitted form of payment. (11/16/17)
Q Can I use the term “REALTOR®” in the name of my real estate firm?
A No. You may use it in connection with the name of your real estate business as an indicator of your membership in the REALTOR® organization. However, the term must be separated from the business name by appropriate symbols or punctuation. “REALTOR®” may not be included as a part of the business name itself. (10/12/17)
Q Do I have to let clients out of a listing agreement just because they ask?
A No, you don’t have to agree to terminate the listing agreement just because a seller asks you to, but you can’t force them to continue with the listing if they want to discharge you as their agent. The discharge may be a breach of the listing agreement, in which case you could hold the seller liable for recoverable damages for breach of contract. (10/26/17)
Q When filling in the blank in paragraph 1(j) of the Offer to Purchase and Contract to specify the expiration of the Due Diligence Period, must a specific date be inserted or is it okay to insert a timeframe instead?
A Inserting a specific date in paragraph 1(j) is typically the best practice for agents and their clients. However, there are certain circumstances where inserting a time frame instead of a date may be desirable. In such a case, the buyer and buyer’s agent should take great care in the wording used in describing the timeframe in order to minimize the potential for uncertainty. (11/02/17)
Q Do I have to file a new certificate for the assumed name I use for my business under the law that went into effect December 1, 2017?
A Yes, you—and anybody else who filed an assumed name certificate before December 1, 2017—must file a new certificate no later than December 1, 2022 in order to keep your assumed business name filing effective. (12/07/17)
Q If someone who has recently listed their home with another broker contacts me for assistance in finding them a new home, is there anything unethical about me entering into a buyer agency agreement with them?
A No, since (1) the service you would be providing as a buyer agent is not inconsistent with the service being provided by the other firm as a listing agent, and (2) you did not use information obtained from MLS to create a relationship with the listing agent’s client. (12/14/17)
Q When my firm is acting as a dual agent and a buyer and seller are negotiating the terms of a contract, can I give advice to either of them regarding negotiation strategy?
A No, unless you are acting as a designated agent for one of them. An agent acting as a dual agent owes the same fiduciary duties to both parties. Because of these identical yet competing fiduciary duties, the agent’s ability to advise and advocate for either client becomes much more limited. In the Real Estate Commission’s words, unless the firm practices designated dual agency, dual agency “effectively neutralizes agents as to their advocacy roles.” (01/25/18)
Q Is there a power of attorney designed especially for the purchase or sale of an identified parcel of real property?
A Yes. On January 1, 2018, a new chapter of North Carolina’s General Statutes took effect changing the law as to all powers of attorney executed on or after that date. Part of the new law includes a new form to use in real property transactions. It is anticipated that this new power of attorney form will prove very useful for real estate transactions in North Carolina. (01/04/18)
Q If a Due Diligence Fee (DDF) is delivered to a listing agent and he or she signs the last page of the Offer to Purchase and Contract acknowledging receipt of the DDF, should the listing agent also seek to obtain the seller’s signature acknowledging receipt of the DDF when it is delivered to the seller?
A Yes. Although the listing agent’s acknowledgment of receipt of the DDF is sufficient for purposes of establishing the buyer’s compliance with the contract, the seller’s acknowledgment of receipt of the DDF is important evidence that the listing agent has complied with the license law obligation to timely deliver the DDF to the seller. (01/18/18)
RESOLVE: NC REALTORS® have free, unlimited access to our Legal Hotline and lawyers with more than 30 years experience. Call 336-294-1415 or email legalhotline@ncrealtors.org with any questions regarding contracts, forms, fair housing, disclosure and more.
