FAQ: AB 2330 “BROKER-ASSOCIATE” AFFILIATE NOTIFICATION

Q. 1: Who is a Broker-Associate?

A Broker-Associate is:

  • An individual licensed as a real estate broker by the California Department of Real Estate
    (DRE)1
  • Who works in the capacity of a salesperson for another responsible broker or
    corporation brokered by another individual

Q. 2: What is a Responsible Broker?

“Responsible broker” means:

  • The broker responsible for the exercise of control and supervision of a salesperson(s) or
    licenses(es) or group of the same
  • Who is subject to discipline under Business & Professions Code § 10177 (h) (“B&P
    Code”) for failure to supervise activity requiring a real estate license
  • Responsible broker may be an individual broker or a corporation

Q. 3: Do Broker-Associates need to work under a written agreement with a Responsible
Broker?

Yes, the Responsible Broker must have a written agreement with the broker-associate (DRE
regulation 2726).

Q. 4: What is Assembly Bill (“AB”) 2330?

  • AB 2330 is legislation that was signed into law by Governor Brown in September 2016
  • AB 2330 adds Section 10083.2 and amends Section 10161.8 of the B&P Code

Q. 5: What does AB 2330 require?

AB 2330 requires the DRE:

  • To post on its website whether a licensee is a broker-associate licensee
  • To identify each Responsible Broker with whom a Broker-Associate is contractually associated with under B&P Code § 10032

AB 2330 requires the Responsible-Broker and Broker-Associates:

  • To immediately notify the Commissioner of the Broker-Associate employment
    agreement in writing
  • To immediately notify the Commissioner of the Broker-Associate termination in writing

Q. 6: When does AB 2330 become law and go into effect?

AB 2330 goes into effect January 1, 2018.

Q. 7: How do I notify the DRE of a licensee’s Broker-Associate status?

  • DRE created a new form, RE 215 – Broker-Associate Affiliation Notification
  • RE 215 shall be used for the sole purpose of notifying the DRE of a Broker- Associate / Responsible Broker affiliation or termination
  • This form is available on DRE’s website
  • All other changes pertaining to an individual broker license, such as changes of
    mailing/main office address, adding or cancelling fictitious business names, or updates to
    contact information should continue to be submitted using the form RE 204 – Broker
    Change Application

Q. 8: Do brokers working in a Broker-Associate capacity under a Responsible Broker prior to January 1, 2018 need to submit a Broker-Associate Affiliation Notification form to the DRE?

  • Yes, Broker-Associates who have worked for a Responsible Broker prior to January 1,
    2017 will still be required to submit a Broker-Associate Affiliation Notification form to
    the DRE.
  • The date of the Broker-Association relationship required on the form shall correspond to the date provided on the contractual relationship agreement between the Broker-
    Associate and the Responsible Broker.

1 As of July 1, 2018, name will change from “California Bureau of Real Estate” to the “California Department of Real Estate.”

This comprehensive Frequently Asked Questions (FAQ) is based on information gathered from the
California Association of REALTORS® (C.A.R.), the California Department of Real Estate (DRE), and the opinion of The Giardinelli Law Group, APC specifically as it relates to AB 2330 “Broker-Associate” Affiliate Notification. This information is subject to change.


Courtside Newsletter: California Association of REALTORS® December New & Revised Forms Release

BY: KELLY A. NEAVEL, ATTORNEY AT LAW
ASHLEY A. RICHARDSON, LAW CLERK
CASEY MCINTOSH, PARALEGAL

 

The week of December 11, 2017, the California Association of REALTORS® (“C.A.R.”) has scheduled the release of three (3) new forms and twelve (12) revised forms for REALTOR® use. Three (3) forms will also be discontinued. Below we discuss these additions and changes in greater detail, delving into how they may affect your practice.

New Forms

1. Amendment of Existing Agreement Terms (AEA)*
Per C.A.R., the AEA is to be used by a party to an existing contract to change the terms. The form can be used to amend a Purchase Agreement, Lease or Month-to-Month Rental Agreement, or other contract, and contains specific parameters surrounding the time frame for accepting and automatic revocation of the amendment. Following the space in which the proposed amendment is to be written, the Buyer/Tenant or Seller/Landlord indicates that the proposal can be revoked at any time, but will be deemed revoked if not accepted by 5 p.m. on the third day from which the initiator signed the AEA, or another specified date and time. The form also contains separate sections for the receiving party to accept or reject the proposed terms. If the terms are rejected, the existing contract remains unchanged. As one might notice, the AEA works in much the same way as the Buyer and Seller Counter Offers.

2. Property Images Agreement (PIA)*
Earlier this year, C.A.R. issued a Legal Q&A entitled “Copyright Issues for REALTORS®,” bringing to light that REALTORS® could run into legal hot water in their use of certain marketing materials. To that end, the PIA is entered into between a broker and a photographer to help REALTORS® avoid copyright infringement, and ensure that both the broker and creator of the work (aka the owner of the copyright) are in agreement. The PIA applies to photographs, videos or other creative works. The form indicates what work is being done, the compensation and payment the photographer is receiving, and specifications for the final images (e.g. format and quality). There is also a section regarding the granting of the photographer’s rights over the images to the broker, either through an assignment agreement, wherein the photographer assigns and transfers all of his or her rights to the images to the broker, or exclusive license agreement, wherein the photographer retains the title and ownership of the images. The photographer must also indicate that he or she has the right to enter the PIA, meaning he or she “owns all right, title and interest in and to the images [and] no third party has any rights in, to, or arising out of the Images.” The photographer can indemnify the broker, and the form acknowledges that the photographer is an independent contractor. Both parties must also acknowledge receipt and understanding of the PIA.

3. Team Agreement (TEAM)
The TEAM is to be entered into between a Team Leader (“TL”) and Team Member (“TM”). Both the TL and TM must be licensed salespersons or broker-associates, working under a responsible broker, who is specified in paragraph 15 of the TEAM. Paragraph 1(D) states that both TL and TM “must remain licensed during the term of [the] Agreement” and must tell the other if his or her license is revoked, suspended, or forfeited, or if the party is no longer working under the responsible broker. The form also defines the duration of the agreement, the scope of the agreement and covered transactions, how pre-existing client relationships will be handled, and compensation. The TEAM contains language to split compensation based on all covered transactions, or based on who generated the transaction, and either as a flat fee or percentage. There is also an option to attach an addendum with different instructions. Paragraph 8 goes on to discuss “Compensation and Other Rights and Obligations Upon Termination.” Should a TM leave the team, specific protocol is laid out for him or her regarding pending transactions or business, future transaction with preexisting clients and team clients, expenses, DBAs and Team Names, and the potential need for a referral agreement if the TM or TL begins working under a new broker.

Other topics that are covered by the TEAM include:

  • Expenses;
  • Team Name;
  • Team Guidelines and Policies;
  • Broker Agreement to compensate parties based on the parties’ agreement;
  • Legal Relationship, including the potential to create an employment status depending on the “actions and intents of the parties and any control extended by one party over the other;”
  • Dispute Resolution;
  • Additional Provisions;
  • Definitions;
  • Attorney Fees; and,
  • Incorporation of any prior agreements.

TEAM attempts to be as all-encompassing as possible, while making it clear that all licensed activity goes through the responsible broker. C.A.R. believes that one of the most important aspects of the form is how it “addresses what happens to ‘clients’ and compensation if the agreement between the team leader and team member is dissolved.” Given some agents’ propensities for seeking out the team with the best fit, and the often-asked question of “who a client belongs to,” this is an important topic indeed.

Revised Forms

1. Buyer Representation Agreement – Exclusive (BRE)

2. Buyer Representation Agreement – Non-Exclusive (BRNE)
The language in the BRE and BRNE has been revised to clarify that agency compliance is not exclusive to 1-4 residential units, and applies to more than just 1-4 residential units. The Dispute Resolution paragraph has also been updated in keeping with the June updates to the Residential Listing Agreement (RLA), and the arbitration advisory directs parties to the C.A.R. Form ARB. It is acceptable to use prior versions of these forms.

3. Back-Up Offer Addendum (BUO)*
There is now a “Notice of Cancellation of Prior Contracts” section on the BUO to advise back-up buyers that prior contracts have been cancelled and they are now in the primary position. Included in the new section is a signature line for the back-up buyer(s) to acknowledge receipt and agreement of the BUO. It is acceptable to use prior versions of this form after the December release.

4. Contingency for Sale of Buyer’s Property (COP)*
The changes on the COP seem to come at a particularly relevant time, given the current market trend for buyers (and, oftentimes, sellers) to want to keep their homes until they find a new home. New language has been added to the COP indicating that the buyer will inform the seller upon the close of escrow (within two (2) days, or another agreed-upon amount of time). Paragraph 1(B) has also been added, which indicates that the buyer is not required to remove the contingency unless given notice, and the contingency must be removed in writing. Furthermore, even if the contingency is removed, all other contractual obligations on the COP remain in effect. Per C.A.R., this was added to clarify that the buyer cannot unilaterally remove the contingency to avoid other obligations. It is acceptable to use prior versions of this form.

5. Manufactured Home Purchase Agreement and Joint Escrow Instructions (MHPA)
Slight but significant modifications were made to the MHPA. Paragraph 1(F) was updated to include the designation that the property is subject to “annual registration and in lieu tax.” Under Paragraph7, “Allocation of Costs,” subparagraph C, a line was added to indicate whether the buyer or seller would pay HDC fees for providing registration and documents. Lastly, Paragraph 12, “Residency Application,” indicates that the buyer is responsible for submitting a completed residency application and any other required information to the park, landlord, or HOA. It is acceptable to use prior versions of this form.

6. Notice to Buyer to Perform (NBP)*
Per C.A.R., the language that was added to the NBP was to dispel the argument “that the NBP can only be used for contingencies or covenants but not both at the same time.” Revisions to the form include language for the seller to give the buyer notice to, “as applicable, remove the specified contingencies and take the specified contractual action.” (Emphasis added.) However, it is still acceptable to use prior versions of this form after the revision’s December release.

7. Parking and Storage Disclosure (PSD)*
According to C.A.R.’s Forms Release Summary, the PSD has been revised to clarify previous confusion caused when the agreement does not include permit parking or storage. There was also a paragraph added for additional disclosures.

8. Receipt for Reports (RFR)*
A paragraph has been added to the RFR stating, “Buyer has been advised that if Buyer receives any report that has not been ordered by Buyer (whether prepared by or for Seller or others), Buyer may have no recourse against the preparer of the report for any errors, inaccuracies or missing information.” Ultimately, this means the buyer may not have any legal recourse for errors in reports prepared by others on behalf of others. It is acceptable to use prior versions of this form.

9. Seller License to Remain in Possession Addendum (SIP)*
The SIP is intended to allow the seller of a property to remain in possession and continue use of the property for a period of less than 30 days. Paragraph 2, “Consideration,” subparagraph A, has been amended to include the language: “If Seller vacates the Property prior to the end of the term in paragraph 1, no portion of the consideration will be returned to Seller unless otherwise agreed in writing.” Paragraph 7, “Insurance,” has also been revised to advise the seller to obtain insurance as his or her personal property is not insured by the buyer. Please note that it is not acceptable to use a prior version of this form.

10. Seller’s Purchase of Replacement Property (SPRP)*
The SPRP has been updated with one addition, and a caveat from C.A.R. Under “Seller’s Purchase of Replacement Property,” subparagraph 1(B) has been added, allowing the seller to inform the buyer that seller has already entered into a contract to obtain another property. Per C.A.R., if this optional box is checked, the seller would want to review, and potentially mark, subparagraph 1(C), which indicates that the agreement is contingent on whether the seller closes escrow on a replacement property. It is acceptable to use prior versions of SPRP.

11. Septic Inspection, Well Inspection, Property Monument and Allocation of Cost Addendum (SWPI)*
The SWPI has been revised to make it clear that a “qualified septic professional” is conducting any inspections, and issuing any certifications. Paragraph 1(D) also now has the language that if an agreement is not reached “within the time for removing the Buyer investigation contingency or the loan contingency” or another agreed-up contingency, then either the buyer or seller can cancel the agreement. Paragraph 2, “Well Inspection and Allocation of Cost,” now has language about where parties can obtain more information regarding well standards, well completion reports and well basics. Prior versions of this form are acceptable to use following its December release.

12. Wire Fraud and Electronic Funds Transfer Advisory (WFA)*
Previously known as simply the “Wire Fraud Advisory,” the WFA has been updated to indicate that not only wire transfers are subject to fraudulent activity. The WFA now warns that fraudulent activity can happen to all forms of electronic payments, including rent payments. The signature lines of the WFA have also been revised to allow for its use with lease agreements. It is acceptable to use prior versions of WFA.

Discontinued Forms

The following forms will no longer be in use after the December forms release:
1. Natural Hazard Disclosure (NHD)
2. Notice of Your “Supplemental” Tax Bill (SPT)
3. Mortgage Loan Disclosure Statement (Borrower) (MS)

Per C.A.R., these forms are either duplicative, or have been superseded by other, more well-known forms. As a result, they may serve to cause confusion and their removal seemed appropriate.

*According to C.A.R., these forms will only be available through zipForm®Plus or from the following Associations: Beverly Hills/Greater Los Angeles Association of REALTORS®, Newport Beach Association of REALTORS®, North San Diego County Association of REALTORS® and Sacramento Association of REALTORS®.


Maintenance notifications for November 7th

Dear Valued Customer,

 

On Tuesday, November 7th starting at 8:00pm PDT and ending at 11:00pm PDT, Supra will be conducting routine maintenance at our data center and some services will be unavailable during this time.

 

How will Updates be Available?

 

What will NOT be Working?

  • SupraNET
  • SupraWEB (only available for update codes)
  • KIM Voice (only available for update codes)
  • Automated Phone Payments (IVR system)
  • ActiveKEY Automatic Updates
  • XpressKEY Automatic Updates
  • DisplayKEY eSYNCs
  • eKEY Syncs and Wireless Updating

 

What WILL be Working?

  • SupraWEB (update codes only)
  • KIM Voice (update codes only)

 

Thank you,

Supra Support Team


Supra Notice of Upcoming Changes to SupraWEB for Office Brokers

Dear Customer,

 

Later this year we will be updating SupraWEB for office brokers.

 

The office broker only version of SupraWEB will be discontinued and its features will transition to the keyholder version of SupraWEB. The site that will be discontinued is accessed at www.supraekey.com by selecting the Login tab and then SupraWEB Login for Offices. Office brokers can currently login to this site with an office ID and password designated by the association or MLS.

 

The keyholder version of SupraWEB is accessed atwww.supraekey.com by selecting the SupraWEB Login button.

 

Updates to SupraWEB for Office Brokers

 

Office brokers will have access to the following features in the keyholder version of SupraWEB:

  • Send messages to all keyholders in the office
  • Manage ShowingTime integration for the office (if ShowingTime is used by the association/MLS)

 

In addition, some new features have been added to provide office brokers some additional tools.

  • Listing assignments can be made from the Office Keybox Inventory report by clicking on the keybox serial number
  • Showing duration added to the Showing and Key Activity report
  • Office reports modified to show the listing address in addition to the MLS number, and the office name will be displayed in the Assigned column if the keyboxes are assigned to an office instead of a keyholder

 

Note that for an office broker to access the keyholder version of SupraWEB, they need to:

  1. Have a Supra key, and
  2. Be granted permission as an office broker

 

Regards,

Supra

 


Supra Maintenance Notifications – Tuesday October 10

Dear Valued Customer,

 

On Tuesday, October 10th starting at 8:00pm PDT and ending at 11:00pm PDT, Supra will be conducting routine maintenance at our data center and services will be unavailable for short periods during this time.

 

How will Updates be Available?

 

What will NOT be Working?

  • SupraNET
  • SupraWEB (only available for update codes)
  • KIM Voice (only available for update codes)
  • Automated Phone Payments (IVR system)
  • ActiveKEY Automatic Updates
  • DisplayKEY eSYNCs
  • eKEY Syncs and Wireless Updating

 

What WILL be Working?

  • SupraWEB (update codes only)
  • KIM Voice (update codes only)

 

 

Thank you,

Supra Support Team


Courtside Newsletter: Ahead of the Curve: Real Estate Technology & What It Means for You

BY: KELLY A. NEAVEL, ATTORNEY AT LAW
ASHLEY A. RICHARDSON, LAW CLERK
CASEY MCINTOSH, PARALEGAL

Tide and time wait for no man, and the Information Age’s effect on real estate is no exception. However, it seems that recently we have been seeing an influx of new technology that not only targets how real estate practitioners distribute and execute forms, but also how consumers buy and sell homes. Currently, there is a back-and-forth argument taking place amongst many REALTORS® with many pushing for growth and expansion of real estate technologies, whilst others argue that these same technologies are disruptive and will take over traditional real estate practices.

Get on the Bus
In the words of Ken Kesey, “you’re either on the bus or off the bus. If you’re on the bus and you get left behind, then you’ll find it again. If you’re off the bus in the first place—then it won’t make a [darn].” The same goes for technology. It has been moving along at a steady clip since the 90s—we can all attest to that. The way REALTORS® do business has been revolutionized with the advent of the internet, email, and smart phones. With all that, consumers’ expectations, and even the consumers themselves, have also changed. According to the National Association of REALTORS® March “Home Buyer and Seller Generational Trends” report, “buyers 36 years and younger (Millennials/Gen Yers) is the largest share of home buyers.” Furthermore, per Goldman Sachs, Millennials make up the largest generation in history. As Millennials move into their prime home-buying years, REALTORS® are being faced with meeting the needs of a generation that grew up in a time of rapid change, especially when it came to technology. While many remember the tell-tale sound of an AOL dial-up, they are all now living their lives online.

The real estate industry has begun to respond in kind. According to Josh Team, Keller Williams’ Chief Information Officer, Keller Williams will invest $3.5 billion into real estate technology in 2017. Companies such as Redfin, Open Listings, Opendoor, Offerpad, and Zillow’s “Instant Offers” are trying to close the perceived gap between what the consumer wants and what the industry provides. Zillow’s “Instant Offers” has caused some waves in the industry of late. The program is in a testing phase right now, but hopes to expand to offer homeowners a way to sell their homes quickly. Verified homeowners confirm information about their homes, list any improvements, and upload photos. They are also given a comparative market analysis (CMA) from a local real estate agent, and an estimate for what the home might sell for on an open market. Investors then present their offers on the home. Zillow ultimately acts as a middleman and encourages the use of an agent throughout the process, but an agent is not required.

HomeLight is a similar company in the Bay Area, playing matchmaker between home buyers and the best possible real estate agent to suit their needs. According to the CEO, Drew Uher, HomeLight’s “value proposition is quite compelling for potential homesellers: Get a better outcome by using an agent who’s proven to sell their listings faster and for more money… Our main challenge is simply…to educate consumers that there’s this better way to sell a home.”

Of these trends that we’re seeing, they seem to be focused on breaching the divide between the consumer and the real estate industy via technology. While that is admirable, consumers are not so easily fooled. According to a study by Aimia, Inc., “Born this Way: The Millennial Loyalty Survey,” people aren’t using mobile apps and technology simply because it’s there. They are more discerning, looking at what technology is really doing for them. Aimia, Inc’s study goes on to say, “All marketing is mobile because that’s where technology is leading us… But…the winners will be marketers who answer that essential question for Millennials: Why?” Ultimately, this is a question that apps and websites can’t answer.

The Human Element
The takeaway from this “real estate disruption” is that real estate professionals are being forced to redefine their role in the process of buying and selling a property, and how they work with clients. The information to make an informed decision about buying a home can be found online, so agents must bring more to the table than the facts that their clients could have found at the click of a mouse (and without the commission fee).

To bridge the divide between what consumers want and what the real estate industry has to offer, brokers and agents should focus on what they, and they alone, can bring to the table: the human element. Numerous articles have repeated the sentiment that nothing can replace a real estate agent as the local expert. Time Magazine reports that “real estate is a local game, and to win you need someone who plays in the areas where you’re looking to buy.” Local agents not only know the neighborhood and recent market trends, but also what is going on in the neighborhood on more granular levels. They’ll know about the neighborhood mom group that meets in the park every Tuesday, and that the community association just voted for a five-year overhaul of the street that your potential house is on. They have their clients’ best interests at heart. Live, human agents aren’t middlemen like online platforms and, because of that, they remain exactly what consumers are looking for when making potentially the biggest investment of their lives.

The key for agents and brokers is to leverage technology to their advantage to show how they are the “local expert.” While many agents are already doing this with their social media platforms, it’s time to take these steps to the next level. Now more than ever, it is important for agents to differentiate and show their value to potential clients. Not only is technology redefining how agents do business, it also seems to be redefining the concept of community. Communities have begun to be forged online, through social media and blogs. Agents can tap into this wellspring to engage with clients, on a personal level and build their own communities, offering the facts, transparency and guidance that people are looking for. This will be especially important for the new generation of homebuyers (Millennials) entering the market. The goal should be to help potential clients realize that you’re not only tech-savvy but also that you communicate effectively and are listening to what they have to say. Agents can use technology to make themselves more effective and efficient, using their knowledge to deliver what the client wants.

No amount of technology will know and understand the myriad emotions involved in a real estate transaction like the competent agent will. In adapting to the future demands of the market, it is important for real estate agents to continue to build their client relationships while also becoming tech-savvy. According to Huffington Post, real estate is “an industry ripe for change.” Technology will be the catalyst for this forward movement and agents can either fight the current, or get swept up in it—the choice is up to them. However, the growth of technology should not mean the inability to connect. Some of the soundest advice that we’ve seen is for real estate professionals to get on the bus and start directing it themselves, ensuring that it goes down a path that will benefit everyone involved.


Courtside Newsletter: Much Ado About “Coming Soon”

BY:JOHN V. GIARDINELLI, ATTORNEY AT LAW
ASHLEY A. RICHARDSON, LAW CLERK
CASEY MCINTOSH, PARALEGAL

With low inventory and decent economy (read: people looking to buy), the real estate market is currently a seller’s dream. However, as we’ve seen in the past, with that comes a host of other problems. The current thorn in many real estate practitioners’ sides are “Coming Soon” signs, and what they actually entail. As innocuous as they may seem, there are many legal ramifications to “Coming Soon” signs, both when done
with the best intentions and with malintent.

The Basics
Part 1—Agency and Fiduciary Duty
Before we delve into why “Coming Soon” signs may be so malevolent, let’s first look at what creates an agency relationship between sellers and their real estate broker. It’s
important to focus on the granular aspects of agency relationship in this instance since the relationship that ensues is considered a “special agency” versus a general agency.
Under Civil Code § 2297, “an agent for a particular act or transaction is called a special agent. All others are general agents.” According to the California Bureau of Real Estate’s (CalBRE) reference book on Agency (which can be found online at www.dre.ca.gov), “the agency relationship between a real estate broker and his or her principal results in a special agency typically limiting the broker to soliciting and
negotiating on behalf of the principal to the real property or real property secured transaction. (Business and Professions Code § 10131 et seq.; Civil Code § 2297).”

This special agency creates a fiduciary duty that real estate practitioners owe to their clients. Included in that duty are the duties of:

  • Good faith
  • Loyalty
  • Confidentiality
  • Fair and honest dealing
  • Reasonable care and skill

According to CalBRE, “The courts have consistently equated the duty of an agent to a principal with the duty owed by a trustee to a beneficiary. The Probate Code provides that, in all matters connected with a trust, a trustee is bound to act in the
highest good faith toward the trustee’s beneficiary, and the trustee may not obtain any advantage over the beneficiary by the slightest misrepresentation, concealment, duress or adverse pressure of any kind.” Fiduciary duty plays a key role in a real estate practitioner’s line of work. People come to real estate agents for help navigating the oftentimes confusing waters of purchasing or selling a property. These laypeople
rely on the agent for the knowledge he or she possesses and therefore trust him or her implicitly with what may be the largest investment of their lives. It is not a duty to be taken lightly, and one never wants to be called into question for having potentially violated it.

Part 2—The Controversial Concept of Dual Agency
Dual agency is a legal, albeit controversial, practice in California. It occurs when an agent “double-ends” a transaction, meaning they represent both the buyer and the
seller. This can arise when a listing agent procures an unrepresented buyer, and the agent thereafter represents both parties in a transaction. It can also occur when two agents at the same brokerage represent the buyer and the seller of the
property. California has strict disclosure laws regarding dual agency, and representation cannot occur without both parties’ consent. Failure to obtain express (written) consent may lead to the broker losing his or her commission and/or rescission of the transaction.

As you may have guessed, dual agency gets murky when you think about an agent’s fiduciary duty. How can an agent represent both parties and still have both of their best interests in mind? It’s a controversial question that does not necessarily have a clear answer. If an agent is truly an upstanding citizen, upholding the tenants of his profession, there should be no issue. However, at the end of the day, an agent makes a commission on the final purchase price of the home and the realities of human nature must also be contended with. Dual agency is an area in which unscrupulous agents may have an opportunity to take advantage of trusting individuals. Per CalBRE, “The conflict of interest which is inherent in dual agency has been recognized by other authorities. The reasons underlying the rules against dual agency are of ancient origin. ‘No man may serve two masters; for either he will hate the one and love the other; or else he will hold to the one and despise the other…’ (Gospel of Matthew, Chapter vi: 24 quoted in Nahn-Beberer v. Schrader (Mo. App. 1936) 89 S.W. 2d 142). Although dual agency is a common practice in California real property and real property
secured transactions, a real estate broker who represents both parties must act with extreme care.”

The Question About “Coming Soon”
With these three factors in mind—agency, fiduciary duty, and dual agency—we return to the issue at hand: “Coming Soon” signs. The issue with “Coming Soon” signs  evolves around this special agency relationship and, more importantly, the fiduciary duty owed to clients. Many agents are expressing concern over whether the use of “Coming Soon” signs violates that fiduciary duty by keeping a listing off the multiple
listing service (MLS) in an attempt to “double-end” a transaction. They are concerned that agents are acting in their own best interests, and not those of their clients. (If they
double-end the transaction by listing it as “Coming Soon” and attracting a potential buyer, they make more money off the commission.)

On the other hand, there are some agents who argue the benefits of “Coming Soon” advertisements, such as creative marketing and generating interest in a property. While there may or may not be legitimate reasons for “Coming Soon” signs, it is important for all agents to be aware of the associated risks involved. The issues of the agency relationship, fiduciary duties, and dual agency are only a few of the topics for which agents need to be familiar. How to Ethically List a Property as “Coming Soon” That said, the “Coming Soon” sign can and does still present problems. Agents and brokers are advised to thoroughly research whether “Coming Soon” advertising is in the best interest of their clients. If it is, they must fully explain to the seller the benefits and risks of keeping a property off the MLS for any length of time, and they must do so to the extent that the fulfillment of their fiduciary duty is never brought into question.

In addition to complying with state license laws, an agent should also check with the rules of their local MLS as they relate to “Coming Soon” marketing and Days on Market calculation. For example, the California Regional MLS (CRMLS) has a new form entitled “CRMLS Seller’s Instruction to Exclude Listing from MLS,” which provides, in part, for an agent to advertise a property as “Coming Soon.” The form allows the seller to instruct that the property will be marketed, but not listed with the MLS until a certain date. If a seller instructs that the property is not to be listed with the MLS until a certain date, the Days on Market will be the beginning date of the Listing Agreement (not the date it was submitted into the MLS). The form may also indicate that the property is to be excluded from the MLS and not marketed by the agent. If a seller instructs that the property is not to be listed with the MLS and not marketed, then the Days on Market will be the beginning date of marketing.

However, not all agents are members of CRMLS and not all MLS’ have such a provision. As a result, the use of “Coming Soon” advertisements may create an issue related to the Days on Market calculation. REALTORS® should also note that the C.A.R. Form “Seller Instruction to Exclude Listing from the Multiple Listing Service” does not have a provision to exclude a property from the MLS for a certain amount of
time. REALTORS® should be hyper-aware of their association’s rules regarding the timeframe to submit listings to the MLS.

Should you have any questions regarding “Coming Soon” signs, dual agency, or any other real estate gray areas, we urge you to consult SRCAR® or qualified legal counsel. Not only would a good intention gone awry not be worth the litigation fees, it could also harm your number one marketing tool: your good name.


Supra eKEY and iOS 11.0

Dear Customer,

 

Apple iOS 11.0

 

Apple recently released operating system iOS 11.0 for iPhones and iPads. We completed testing of the new iOS with the eKEY app and are happy to announce there are no issues.

 

Thank you,

Supra


Rent vs. Buy

The housing market across California has had large price gains over the past years, with statewide median prices attaining November 2007 highs. Consumers often contemplating whether it is more beneficial to buy a property now or continue renting. To assist with this decision, C.A.R. has looked at the costs and benefits of renting versus owning property in California and eight of its local regions over a seven year time horizon.

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Supra eKEY Android OS Update

Dear Customer,

 

Android 8.0

Android recently released operating system 8.0 for phones and tablets. We completed testing of the new OS with the eKEY app and are happy to announce there are no issues.

 

Thank you,
Supra