2013 Maryland Code
BUSINESS OCCUPATIONS AND PROFESSIONS
§ 17-530 - Disclosure of relationship with lessor or seller

§17-530.

(a) (1) In this section the following words have the meanings indicated.

(2) “Buyer’s agent” means a licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson who represents a prospective buyer or lessee in the acquisition of real estate for sale or for lease.

(3) “Cooperating agent” means a licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson who:

(i) is not affiliated with or is not acting as the listing real estate broker for a property; and

(ii) assists a prospective buyer or lessee as a subagent of the listing real estate broker, in the acquisition of real estate for sale or for lease.

(4) “Intra-company agent” means a licensed associate real estate broker or licensed real estate salesperson who has been designated by the real estate broker who the associate real estate broker or licensed real estate salesperson is affiliated with to act as a dual agent on behalf of a seller or lessor or buyer or lessee in the purchase, sale, or lease of real estate that is listed with the real estate broker.

(5) “Dual agent” means a licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson who acts as an agent for both the seller and the buyer or the lessor and the lessee in the same real estate transaction.

(6) “Seller’s agent” means a licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson who:

(i) is affiliated with or acts as the listing broker for real estate; and

(ii) assists a prospective buyer or lessee in the acquisition of real estate for sale or for lease.

(b) (1) A licensee who participates in a residential real estate transaction as a seller’s agent, buyer’s agent, or as a cooperating agent shall disclose in writing that the licensee represents the seller or lessor or the buyer or lessee.

(2) The disclosure shall occur not later than the first scheduled face-to-face contact with the seller or lessor or the buyer or lessee.

(3) (i) In any residential real estate transaction involving a cooperating agent as defined in this section, it shall be the obligation of the cooperating agent to make the written disclosure to the buyer or lessee required under this section.

(ii) In any residential real estate transaction that does not involve a cooperating agent as defined in this section, it shall be the obligation of the seller’s agent, as defined in this section, to make the written disclosure to the buyer or lessee required under this section.

(4) In any residential real estate transaction involving a buyer’s agent, it shall be the obligation of the buyer’s agent to make the written disclosure to the seller or lessor or the agent of the seller or lessor as required under this section.

(5) The written disclosure shall explain:

(i) the differences between a seller’s agent, buyer’s agent, cooperating agent, dual agent, and intra-company agent;

(ii) the duties of a licensee to exercise reasonable care and diligence and maintain confidentiality;

(iii) that a licensee who assists a buyer or lessee in locating residential real estate for purchase or lease and is neither affiliated with nor acting as the listing real estate broker for any real estate shown or located, is presumed to be acting as a buyer’s agent on behalf of the prospective buyer or lessee, unless either the licensee or the prospective buyer or lessee expressly declines to have the licensee act as a buyer’s agent;

(iv) that regardless of whom a licensee represents in a real estate transaction, the licensee has a duty to treat each party fairly, promptly present each written offer and counteroffer, respond truthfully to each question, disclose all material facts that are known or should be known relating to a property, and offer each property without discrimination;

(v) that a licensee is qualified to advise only on real estate matters and that legal or tax advice should be obtained from a licensed attorney or accountant;

(vi) the need for an agreement with a seller’s agent, buyer’s agent, or dual agent to be in writing and to include the duties and obligations of the agent, how and by whom the agent will be compensated, and any fee-sharing arrangements with other agents;

(vii) the duty of a buyer’s agent to assist in the:

1. evaluation of a property, including the provision of a market analysis of the property; and

2. preparation of an offer on a property and to negotiate in the best interests of the buyer;

(viii) the possibility that a dual agency may arise in a real estate transaction and the options that would become available to the buyer and seller or lessee and lessor; and

(ix) that any complaints concerning a licensee may be filed with the State Real Estate Commission.

(c) Except as otherwise provided in subsection (d) of this section, a licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson may not act as a dual agent in this State.

(d) (1) (i) If a licensed real estate broker or a designee of the real estate broker obtains the written informed consent of all parties to a real estate transaction, the real estate broker may act as a dual agent in the transaction.

(ii) When acting as a dual agent in a real estate transaction, a real estate broker or a designee of the real estate broker shall assign a licensed associate real estate broker or licensed real estate salesperson affiliated with the real estate broker to act as the intra-company agent on behalf of the seller or lessor and another licensed associate real estate broker or licensed real estate salesperson affiliated with the real estate broker to act as the intra-company agent on behalf of the buyer or lessee.

(iii) 1. Except as otherwise required by this title and except to the intra-company agent’s real estate broker or a designee of the real estate broker, an intra-company agent may not disclose information that a seller or buyer in a real estate transaction requests to remain confidential.

2. Except as otherwise required by this title, the real estate broker or the designee of the real estate broker acting as the dual agent may not disclose confidential information to the buyer or seller or the buyer’s or seller’s intra-company agent in the same real estate transaction.

(iv) If a real estate broker offers any financial bonuses to licensees affiliated with the broker for the sale or lease of real property listed with the real estate broker, the real estate broker shall provide to each party to a real estate transaction a statement that discloses that financial bonuses are offered.

(v) An intra-company agent representing the seller or buyer may provide the same services to the client as an exclusive agent for the seller or buyer, including advising the client as to price and negotiation strategy, provided that the intra-company agent has made the appropriate disclosures to the client and the client has consented, as required by this section, to dual agency representation.

(vi) The provisions of the services specified in this subsection may not be construed to be a breach of duty of the licensee, provided that the licensee has complied with the duties specified in § 17-522 of this subtitle.

(2) The written consent shall identify each property for which the real estate broker will serve as a dual agent.

(3) The written consent shall include a statement that:

(i) the real estate broker receives compensation on the sale of a property listed only by the broker;

(ii) as a dual agent the real estate broker represents both the seller and the buyer and there may be a conflict of interest because the interests of the seller and the buyer may be different or adverse;

(iii) as a dual agent the real estate broker does not owe undivided loyalty to either the seller or the buyer;

(iv) except as otherwise required by this title, a dual agent may not disclose information that a seller or buyer in a real estate transaction requests to remain confidential to the buyer or seller in the same real estate transaction;

(v) unless authorized by the seller, a dual agent may not tell a buyer that the seller will accept a price lower than the listing price or accept terms other than those contained in the listing agreement or suggest that the seller accept a lower price in the presence of the buyer;

(vi) unless authorized by the buyer, a dual agent may not tell a seller that the buyer is willing to pay a price higher than the price the buyer offered or accept terms other than those contained in the offer of the buyer or suggest that the buyer pay a higher price in the presence of the seller;

(vii) a dual agent may not disclose the motivation of a buyer or seller or the need or urgency of a seller to sell or a buyer to buy;

(viii) except as otherwise required by this title, if the information is confidential, a dual agent may not disclose any facts that lead the seller to sell;

(ix) the buyer or seller does not have to consent to the dual agency;

(x) the buyer or seller has voluntarily consented to the dual agency; and

(xi) the terms of the dual agency are understood by the buyer or seller.

(4) (i) A cause of action may not arise against a licensee for disclosure of the dual agency relationship as provided by this section.

(ii) A dual agent does not terminate any brokerage relationship by making any required disclosure of dual agency.

(5) (i) In any residential real estate transaction, a licensee may withdraw from representing a client who refuses to consent to a disclosed dual agency and to terminate the brokerage relationship with the client.

(ii) The withdrawal may not prejudice the ability of the licensee to continue to represent the other client in the transaction, nor to limit the licensee from representing the client who refused the dual agency in other transactions not involving dual agency.

(e) (1) The State Real Estate Commission shall require a licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson who participates in a residential real estate transaction to utilize a standard disclosure form in each real estate transaction that includes the information specified in subsection (b)(5) of this section.

(2) The State Real Estate Commission shall require a licensed real estate broker who acts as a dual agent and a licensed real estate associate broker or licensed real estate salesperson who acts as an intra-company agent in a real estate transaction to utilize a standard consent form that includes the information specified in subsection (d)(3) of this section.

(f) (1) The State Real Estate Commission shall prepare and provide a copy of:

(i) the standard disclosure form required under subsection (b) of this section to each licensee in this State; and

(ii) the standard consent form required under subsection (d) of this section to each licensee in this State.

(2) The disclosure form and the consent form shall be:

(i) written in a clear and coherent manner using words with common and everyday meanings;

(ii) appropriately divided and captioned by their various sections; and

(iii) printed in at least 10 point type.