Ct Real Estate Agency Law Review & Fair Housing Part 1

Connecticut Real Manor Bureau Police Review and Fair Housing Role One Mandatory Continuing Education Course 2018 -2020 CE Bicycle

This course was adult past the UConn Eye for Real Estate at the request of the Connecticut Existent Estate Commission We thank the following individuals for their contributions to this course: • • • Ben Castonguay; Chair, Connecticut Real Estate Commission Lana Ogrodnik; Connecticut Existent Estate Commission Amy Bergquist; Connecticut Real Estate Committee Kelly Harvey; Examiner, CT Department of Consumer Protection Kristen Haseney, Esq. ; Acquaintance Counsel, Connecticut REALTORS® Terry Hastings; Managing director, Weichert Realtors, Ridgefield, CT Rhonda Ivey-Lentini; Dynamic Directions, Inc. Erin Kemple; Executive Director, Connecticut Fair Housing Heart Lucy Michaud, Esq. ; Asst. Ext. Professor, UCONN Eye for Existent Estate • Valerie Votto, Esq. ; Valerie Ann Votto, LLC Nosotros also want to thank the National Association of Realtors for granting two permission to employ the NAR Principles in this course.

Overview of this three -Hour Mandatory Continuing Instruction Course for all Connecticut Real Manor Licensees • Agency Law • Dual Agency • Designated Agency • Fiduciary Duties • Agency Agreements and Practice This grade meets the minimum requirements as set forth by the Connecticut Department of Consumer Protection and Connecticut Existent Estate Commission. 3 CT 2018 -2020 CE

Connecticut Real Manor iii -Hr Agency Law Review Slide # and Fair Housing (Function Minutes 1. Agency Law…. . ……………. 5 One) 2. Dual Agency………………. thirteen 30 15 3. Designated Agency …………. …. ………. 20 fifteen 4. Fiduciary Duties……………. . 25 30 5. Bureau Agreements…………………. . . . 34 60 vi. Agency Do……………. 56 xxx Total = iii Hours CT 2018 -2020 CE 4

AGENCY LAW

Agency Police Pretest i. Agents must require potential True buyers or Falseto sign either a heir-apparent representation or unrepresented persons agreement before showing their listed backdrop. TRUE 2. A designated agent just represents one party and is not a dual agent. TRUE 3. Brokers are allowed to represent the seller and heir-apparent every bit long as both parties sign a listing understanding. CT 2018 -2020 CE Fake 6

Agency Constabulary Pretest iv. Agents representing a landlord True or may Falseshow the customer's apartments to a potential tenant who has signed an Unrepresented Persons Disclosure grade. TRUE v. A fiduciary relationship arises when the seller's banker shows the listed property to buyers represented past another broker. FALSE 6. Subagency is illegal in Connecticut. Imitation 7. A dual agent is required to act in the best interests of both the seller and the buyer. CT 2018 -2020 CE seven True

Bureau Police Pretest True or Fake 8. Dual agency consent can be obtained at the time an agency agreement is signed. False nine. A brokerage business firm representing 2 buyers interested in the same property is non a dual amanuensis. TRUE 10. The bureau disclosure notice is given to an unrepresented buyer or seller. TRUE CT 2018 -2020 CE viii

Bureau Law • An agent represents the interests of some other person chosen the principal (client). • The role broker is the agent. • All salespersons/brokers who work for that office banker are also agents of the chief. CT 2018 -2020 CE nine

Bureau in Real Estate • Banker and If there is no written understanding, there is no bureau relationship. CT 2018 -2020 CE Salespersons • Client Agency is created past a written agreement. • Customer ten

Client Agents must: • promote their client's interests higher up their ain. • follow all lawful instructions of the client. • negotiate the best terms and weather for client. • go along conversations and information between the agent and client confidential. • act ethically and honestly in all real estate matters. • treat all parties to the transaction with courtesy and respect. CT 2018 -2020 CE 11

Customer • Amanuensis can assist just not advocate for customer. • Conversations and information between the agent and customer are not confidential. • Agent may accept a duty to disclose to customer that conversations are not confidential. CT 2018 -2020 CE 12

DUAL Bureau

Dual Agency A licensee may deed as a dual agent by representing both the buyer and seller in the aforementioned transaction. Licensees: • must treat both the buyer and seller adequately. • cannot represent ane political party to the detriment of the other. • must non disclose confidential information to the other side. • must provide non-confidential facts each political party 14 CT 2018 -2020 CE needs to make an informed decision.

Parties to Dual Agency • The parties to the dual agency agreement are the buyer, seller, and the banker. • The salesperson is not a political party to the agreement. • Salespersons are under the Broker's supervision. CT 2018 -2020 CE C. Thousand. S. Section 20 -325 g – Dual Agency Consent fifteen

Dual Agency Situations • Dual agency occurs when a buyer's agent shows the client a property listed past that agent's house, or • When the listing agent shows property to a buyer who is also represented past the same firm. • In dual agency situations, both the buyer and CT 2018 -2020 seller volition. CEbe agreement. asked to sign a consent 16

Case of Dual Agency • Seller signs a listing agreement in the real estate firm's Avon office. • Heir-apparent signs a representation understanding in the same firm'south Farmington office. • Agents from all of that business firm's offices represent both the seller and the buyer. • All parties to the real estate transaction accept to sign a dual agency consent agreement. CT 2018 -2020 CE 17

Landlord and Tenant Dual Agency Dual agency applies to brokers representing both the landlord and tenant in the rental of an apartment. Both the landlord and tenant would have to sign a dual agency consent agreement. CT 2018 -2020 CE xviii

Dual Bureau Review • A broker or salesperson may act as a dual agent by representing both the buyer and the seller with their informed written consent. • The licensees shall exist neutral with regard to any conflicting interest between the buyer and seller. • If either buyer or seller practise not hold to dual agency, the firm cannot stand for both buyer 19 CT 2018 -2020 CEas a dual amanuensis. and seller

DESIGNATED Bureau

Designated Agency • A designated amanuensis is appointed past the broker to represent one party (either the buyer or seller) in the same existent estate transaction. • Designated amanuensis must have the informed written consent of buyer and seller. • Parties to the designated bureau agreement are the broker, heir-apparent and seller, not the. CEsalesperson or existent manor team. 21 CT 2018 -2020

Designated Agency is not Mandatory • The broker of tape may appoint designated agents to represent each party, but is non required to practice so. • If any of the parties to the real manor transaction pass up to sign the agreement, the broker cannot proceed with the appointment of designated agents. 22

Review of Designated Bureau • Brokers may assign a designated buyer agent and a designated seller agent inside the real estate firm. • If the heir-apparent or seller request a designated agent, the firm must comply or refer one of the clients to another real estate firm. • Designated agents are non dual agents, but the broker and the firm continue to exist dual 23 agents. CT 2018 -2020 CE

Now, for the TEST… QUESTION: Yous are a new salesperson, and the seller has but signed a listing agreement. Your proper name is on the contract every bit the existent estate agent along with the seller's proper noun. Is this okay? Answer: No! The list agreement must be between the broker and the seller. The agent is authorized to sign on behalf of the broker. CT 2018 -2020 CE 24

FIDUCIARY DUTIES

Fiduciary Duties • A fiduciary is a person who occupies a position of special trust in relation to another person. • Fiduciaries are held to a HIGHER standard of care than non-fiduciaries. • Agents must act in the Best Interests of 26 the Main when conveying out their duties. CT 2018 -2020 CE

Agents are Fiduciaries Bureau is a fiduciary relationship with special duties of: 1. Obedience 2. Loyalty 3. Disclosure iv. Confidentiality 5. Accountability 6. Reasonable Care and Diligence 27 Fiduciary =Former CAR CT 2018 -2020 Duties CE

ane. Obedience • Agents are obligated to obey promptly and efficiently all lawful instructions of the client. • Agents must act ethically and in good organized religion when representing their clients. CT 2018 -2020 CE 28

two. Loyalty • Agents must human action at all times in the best interests of their main/client. • Agents have a duty to avoid whatever conflicts of interest that may compromise their undivided loyalty to the master. • Agents must human action for the benefit of their clients in all matters connected with the real estate transaction. CT 2018 -2020 CE 29

iii. Disclosure • Agents must disclose to their clients all material information relating to the status of the house. • Agents accept a fiduciary duty to disclose whatever facts that would touch the client's ability to buy or sell. CT 2018 -2020 CE 30

4. Confidentiality • Safeguard your customer'southward information, unless keeping the confidence would violate residential property status disclosure requirements. • Personal and fiscal information, such equally a reason for buying or selling, must be kept confidential. • Confidential information cannot be revealed the licensee during or after the agency 31 CTby 2018 -2020 CE human relationship ends.

5. Accountability • Agent must account for all money and documents beingness held for the customer. • Trust funds held on behalf of the client must be deposited into a carve up escrow business relationship within three (3) banking days. • Combining banker's funds with customer's funds in the same business relationship is a breach of fiduciary duty. CT 2018 -2020 CE 32

6. Reasonable Care and Diligence • Agents must utilize reasonable intendance and diligence in representing their client'due south involvement in the real estate transaction. • The Standard of Care is that of a competent licensed and law-abiding existent manor professional. CT 2018 -2020 CE 33

Bureau AGREEMENTS

Agency Agreements Agency agreements run from the broker to the client and all licensees affiliated with that banker. CT 2018 -2020 CE 35

Client or Customer? • If a consumer enters into a written existent estate agency agreement, it is a Client relationship. • If a consumer refuses to enter into a written agency agreement, then it is a Client relationship. CT 2018 -2020 CE 36

Customer Human relationship • If it is a customer relationship, y'all must disclose non-agency by providing a Real Estate Bureau Disclosure Discover Given to Unrepresented Parties • You lot can only show in-business firm listings to customers as the seller's agent. • You demand subagency consent or a buyer representation agreement to show another 37 listings to a customer. CT house's 2018 -2020 CE

Subagent • A subagent is a 2d banker or agent authorized to assistance the seller'southward agent to human action on the principal's behalf. • A cooperating broker can only act as a subagent of a seller's banker if the seller consents to the subagency. CT 2018 -2020 CE 38

Buyer Representation • Agent represents the heir-apparent in a real estate transaction • Arranges property showings that encounter the heir-apparent's needs • Helps the heir-apparent obtain information nearly the property • Directs buyer to the proper resources for additional information the heir-apparent seeks virtually the belongings or area • Advises the heir-apparent on what price to offer the seller • Deposits escrow checks within iii banking days of signed offer CT 2018 -2020 CE the • Negotiates best price and terms for the buyer 39 • Monitors all dates, events and requirements for the

Buyer Representation Understanding • The Buyer Representation Agreement must exist signed at the first personal coming together. • Heir-apparent signs a representation agreement with one broker and agrees to pay sure fees for help with finding a home. • If a potential buyer refuses to sign a Buyer Representation Agreement, the Listing Agent must ask the buyer to sign an Unrepresented Persons Disclosure before showing the belongings. • If buyers are not represented, the licensee attempting to represent them as a heir-apparent's broker cannot assist xl CT 2018 -2020 CE them.

Buyer'south brokers must disclose to their clients whatsoever: • facts affecting the value of the property • personal relationship between buyer's broker and the seller, or the property • other offers or counteroffers that accept been fabricated on the property • information that would affect the heir-apparent's ability to purchase the belongings CT 2018 -2020 CE 41

Seller Representation A list amanuensis representing the seller in a real estate transaction: • prepares a competitive marketplace analysis of the seller'southward belongings. • develops and implements constructive marketing strategies for the seller, including asking price and staging. • informs the seller of how much other comparable homes have sold for in the neighborhood. • promptly presents all offers to the seller. 42 negotiates CT • 2018 -2020 CE exclusively on the seller'south behalf. • monitors all dates, events and requirements for the

Seller Bureau • The written list understanding with the seller must clearly country the bounty arrangement. • Seller must comply with all state and federal disclosure requirements. • Seller may choose to pay $500 equally a credit to buyer at the closing, instead of completing the Residential Belongings 43 CT 2018 -2020 CE Status Disclosure Report.

Representation Agreements must be signed at the first personal meeting SELLER Buyer 1. Open up List iv. Open up Right to Correspond Heir-apparent 2. Exclusive Agency Listing 5. Exclusive Agency Right To Stand for Heir-apparent 3. Sectional Right To Sell 6. Exclusive Right To Represent Heir-apparent Other Agreements vii. Limited Services 8. Unrepresented Persons 44

1. Open List • For Sale past Possessor (FSBO) abode is sold without a list agent. • Open up Listing is a non-exclusive agreement, significant that the seller may sign open listing agreements with multiple existent estate brokers and pay but the one broker who brings an able buyer whose offer the owner accepts. CT 2018 -2020 CE 45

2. Exclusive Bureau Listing • List Agreements must exist entered into earlier a broker or salesperson attempts to negotiate on behalf of the seller, marketplace the property, post a sign, or advertise the property in any fashion, including on social media. • With an Exclusive Bureau Listing: • a banker represents the sellers, • but sellers reserve the right to sell the belongings on their own without paying a committee to their 46 CT 2018 -2020 CE agent.

3. Exclusive Right to Sell • An Exclusive Right to Sell list exists when the seller'south banker will receive a commission from the seller, regardless of who brings the buyer into the purchase. • When the broker has an Exclusive Correct to Sell, the sellers cannot list the property with any other amanuensis and must pay the agent'southward commission fifty-fifty if the sellers (and non the 47 CT 2018 -2020 amanuensis)CE discover a buyer.

4. Open Right to Represent Buyer With an Open up Right to Stand for Buyer agreement: • Buyers are gratis to piece of work with some other banker house, or find a property on their ain. CT 2018 -2020 CE 48

5. Exclusive Bureau Right to Represent Buyer • If the client agrees to sign an Exclusive Bureau Right to Represent Buyer, a specific brokerage firm: • is authorized to assist the heir-apparent with locating and purchasing holding; • will negotiate on the heir-apparent's behalf; and • When buyers enter into a buy agreement, they are obligated to pay the banker a commission. • Buyers may observe a property on their own and non owe a commission CT 2018 -2020 CE to the broker. 49

six. Sectional Right to Represent Buyer • If the client signs an Sectional Right to Represent Buyer understanding, the payment of commission provision must be clearly explained and conspicuously disclosed in the wording of the bureau contract. • The broker cannot require a buyer to sign an Sectional Correct to Stand for Buyer Agreement. CT 2018 -2020 CE fifty

7. Limited Services • A express services company is a legitimate business concern. • A limited services company may offer any variety of services in different packages, or for less than full brokerage services. • Limited services are priced a La Carte, and may exist offered for a flat fee or whatsoever other legally accepted way. CT 2018 -2020 CE 51

viii. Unrepresented Persons • Anyone who is not represented by an agent must be asked to sign an Unrepresented Persons Understanding at the first coming together in person, or when contacted on the telephone, or by email. • Agents may prove property to an unrepresented person, but the belongings must be listed by the amanuensis's sponsoring banker. In 52 this situation, the broker represents the seller. CT 2018 -2020 CE

Unrepresented Persons Disclosure • If the Unrepresented Persons Disclosure is not signed, the amanuensis may write "Refused to Sign" on the class and yet show the business firm'southward listed holding to the unrepresented person. • The Unrepresented Persons Disclosure states that the broker represents the seller, and that buyer does not want to exist represented by the seller'south Listing Agent. 53 CT 2018 -2020 CE

Interference with Agency Relationships • Licensees are prohibited from interfering with existing agency relationships. • Listing agents are prohibited from communicating straight with a buyer represented past another broker. • Buyer's agents cannot endeavour to take another broker'south list. CT 2018 -2020 CE 54

At present, for the TEST… An agent is showing property that is listed past her affiliated broker to a potential buyer. Does the buyer take to sign a Buyer Broker Agreement? No! The buyer has a choice to be represented or unrepresented. If the heir-apparent wants to be represented, he will sign a Buyer Representation Agreement. If not, he will sign an Unrepresented Persons Disclosure. CT 2018 -2020 CE v v

AGENCY PRACTICE

Working with the Heir-apparent as a Customer: • Agents representing the Seller: • must provide Buyer with Real Estate Bureau Disclosure Discover Given to Unrepresented Parties C. G. South. Section xx -325 d – Disclosure of Representation • can only show in-house listings • can requite buyer data on property, agent's business firm, mortgage rate and lending institutions • Listing agents cannot: • ask Heir-apparent to disembalm confidential information • bear witness belongings listed with another business firm CT 2018 -2020 CE 57

1. What should yous do? • Heir-apparent has approached the seller's broker about viewing properties, • but the buyer does not want to sign a Heir-apparent Representation Agreement. CT 2018 -2020 CE 58

You should: • ask whether heir-apparent is currently being represented past another firm. • explicate your firm'southward office policy on dual agency, designated bureau, and other legal relationships that you could potentially have with the buyer. • explain that you can piece of work with the heir-apparent as a customer for your broker'south own listings. • tell buyer not to provide confidential information to you until you accept entered into an bureau relationship with the heir-apparent. CT 2018 -2020 CE 59

two. What should you do? • Y'all get a call from someone who wants to come across you at a property listed with another business firm. CT 2018 -2020 CE lx

You should: • Ask whether the person is represented by another firm. • Explain agent's house's bureau policies. • Explain that in club to bear witness another business firm'due south listing, the person must sign a buyer representation agreement. • Suit for a meeting where the agent can explicate heir-apparent agency more fully to buyer. • Note that agent could testify buyer an in-house listing in the capacity of the seller's representative, after having provided Buyer with the Real Manor Agency Disclosure Find Given to Unrepresented Parties. CT 2018 -2020 CE 61

3. What should you do? • Buyers are interested in inbound into a Buyer Agency Agreement, • but they do not want to accept any fiscal responsibility for your committee. CT 2018 -2020 CE 62

You should: • specifically and accurately explain the bounty arrangement in the Buyer Bureau Understanding. • Some options are that: • Buyers take no obligation to pay you a fee nether any circumstances; or • Buyers take an obligation to pay yous a fee merely if seller or seller's agent does not recoup y'all; or CT 2018 -2020 CEhave • Buyers an obligation to pay yous a fee. 63

four. What should you do? • Firm policy allows representation of both buyers and sellers, so a dual agency conflict may arise. • At the fourth dimension of her buyer bureau consultation with the firm, you notify buyer of this possibility. • Buyer asks you "What will happen if I am interested in making an offer on 1 of your in-house listings? " CT 2018 -2020 CE 64

Yous should explicate how the firm handles dual bureau: "If you are interested in making an offering on an in-house listing, our firm would exist a dual agent. The business firm would inform y'all of this situation before you write upwardly the offer. " "With your approval and the seller's written consent, we could proceed in one of two ways. Get-go the firm and all of its agents could human activity as dual agents representing both you lot and the seller. As a dual amanuensis, the firm would accept sure prohibitions against disclosure of confidential information about yous to the seller and vice versa. Second, the house could assign a designated amanuensis inside the firm to correspond you, and another agent to represent the seller. While the firm would still be considered a dual agent, your designated agent would owe full loyalty to y'all. " "If either you or the seller practise not agree to either of these options, the house would take to terminate our bureau agreement with i of you. " CT 2018 -2020 CE 65

5. What should you practice? • Buyer contacts you lot about a belongings. • Buyer states that she has previously signed a Buyer Agency Agreement with another firm. • Now the heir-apparent wants you lot to exist her agent. CT 2018 -2020 CE 66

You lot should: • not encourage the buyer to break her agency understanding with the other firm. Penalties against you lot for advising buyer to switch: • You may lose your license. • You may take to pay a fine. • You cannot assist the heir-apparent while she is nether an agency agreement with another business firm. CT 2018 -2020 CE 67

Any Questions or Comments? Delight contact Lucy Michaud 860 -486 -3773 lucy. [electronic mail protected] edu University of Connecticut 2100 Hillside Route, Unit 1041 Storrs, CT 06269 -1041 68

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