Non-disclosure agreements (“NDA”) can be a valuable tool to agents. The following addresses suggested uses, as well as using the California Association of Realtors’ Non-Disclosure Agreement.
SITUATION NO. 1: Buyer wishes to make an offer to purchase the seller’s property. Buyer does not want the offer “shopped” or disclosed to any other Buyer. How can the buyer accomplish this?
RESPONSE: Buyer’s agent can use the California Association of Realtors’ Confidentiality and Non-Disclosure Agreement (“NDA”). To keep buyer’s offer confidential. The NDA should be provided to the listing agent PRIOR TO submission of the offer. Once the NDA is signed, buyer’s agent can submit their offer ensuring it stays confidential.
SITUATION NO. 2: Seller has highly confidential disclosures, which seller does not wish to include in a disclosure package. However, agent has advised seller that the disclosures must be made to any interested buyer. How can the agents address this situation?
RESPONSE: CAR’s NDA can be used specifying that the disclosure will be kept confidential. The listing agent should ensure the NDA is signed BEFORE the disclosure is provide to the buyer.
SITUATION NO. 3: Buyer is a famous and well-known person. Buyer would like to see seller’s property, but does not want buyer’s identity or any information about the buyer disclosed to the public. How can the agent proceed?
RESPONSE: CAR’s NDA can be edited to refer to buyer’s identity and related information. Alternatively, attached to this tip is a proposed non-disclosure agreement requiring the seller and the agents to keep this information regarding the buyer confidential.
SITUATION NO. 4: Seller wishes to meet with agent to discuss the potential sale of a property. However, the seller is demanding a non-disclosure agreement preventing agent from disclosing to anyone that the property may be listed for sale. How can the agent proceed?
RESPONSE: Attached to this tip is a proposed non-disclosure form that can be adapted and used by the parties for this purpose.
SITUATION NO. 5: Seller seeks to keep information regarding the sale of the property confidential. How can the seller accomplish that?
RESPONSE: Listing agent can use BRM’s non-disclosure agreement attached hereto. Listing agent should ensure the buyer’s agent signs it as well as the buyer.
DISCUSSION:
Non-disclosure agreements can be very valuable if clients wish to keep information regarding themselves or the property confidential. CAR has a form that can be used by the agents. Broker Risk Management also has two variations of non-disclosure agreements attached to this tip. If agents need additional assistance, please let us know.
PRACTICE TIPS:
- If a party wishes to keep information confidential, agents should consider using a non-disclosure agreement. It is recommended that agents discuss the variations of the agreements with their manager before using one.
- Always ensure you have a fully executed non-disclosure agreement prior to presenting an offer to the other side or releasing any confidential information. If the information is provided before the parties agree to keep it confidential, there is no obligation by either party to keep it confidential.
WEEKLY PRACTICE TIP: DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is an attorney-client privileged communication for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management LLP. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry but rather are intended to suggest good risk management practice.