Agency Law Governmental Regulations
Options for Relationships
In Minnesota there are five options for relationships:
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Seller's Agent: representing and acting for the seller only. May be a listing agent, or any REALTOR® licensed to the listing broker, or a selling subagent. |
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Subagent: a broker or salesperson who is working with a buyer, but represents the seller. |
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Buyer's Agent: representing and acting for the buyer only. As with a listing contract with sellers, an agreement for buyer representation must be in writing. |
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Dual Agent: one licensee representing both the seller and the buyer as clients in one transaction, or two agents licensed to the same broker, one of whom represents the seller and one of whom represents the buyer in one transaction. This requires full disclosure and informed consent of both parties. Dual agents have a limited role, must not advocate or negotiate for either party, and must not act to the detriment of either party. |
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Facilitator: a real estate licensee who works for a buyer, a seller or both in a transaction but does not represent either in a fiduciary capacity as a Buyer's Broker, Seller's Broker or Dual Agent. Facilitators may perform services for consumers, but do not represent them. Facilitators are bound by license law and common law, but owe only the fiduciary duty of confidentiality unless other fiduciary duties are agreed to between licensee and consumer. |
Required Forms
Under Minnesota law, a form entitled Agency Relationships in Real Estate Transactions must be presented at first substantive contact to a buyer or seller in any real estate transaction. If there is to be any agency representation, or a nonagency relationship, there must be a written contract with all elements required by statute for the particular agreement.
Timing for Disclosures and Contracts
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An Agency Relationships in Real Estate Transactions form must be presented to a buyer and seller at first substantive contact with that party. This is a disclosure form, NOT a contract, although it does ask for the party's signature as an acknowledgment. |
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Listing contracts must be signed before offering/advertising a property for sale or lease. |
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Buyer representation contracts must be signed before taking any action to represent a buyer and before a purchase agreement is signed. |
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Nonagency Services Agreements must be signed before performing services requiring a license. |
Office Policies:
Each Brokerage Company should have a written policy on agency which is distributed to everyone in the office, addressing the following issues:
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Dual Agency Practice - whether the practice is allowed, if so, whether single agent dual agency is allowed, procedures for sales meetings and files to protect against disclosure of confidential information, dual agent behavioral guidelines; |
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Facilitator Practice - whether the practice is allowed, if so, facilitator behavioral guidelines; |
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Buyer Representation - whether either Exclusive or Nonexclusive Buyer Representation Contracts are allowed or just one of these options, process to follow if a consumer wishes to work with an agent in the office after having some contact (or a contract) with another agent; |
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Subagency Practice - whether the brokerage offers subagency as an option for selling brokers, if no, how to handle inquiries or requests from agents acting as subagents whose customers want to see a property listed by the brokerage. |
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