BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
On May 5, 2025, Broker Risk Management (“BRM”) presented its Spring risk management seminar. Topics included the following: legal issues arising out of the current market; war stories; disclosure issues; agent trouble areas; overview of new statutes; overview of CAR upcoming forms release; Department of Real Estate updates. That webinar will be reshown on May 12, 2025. Thereafter, it will be posted to BRM’s website for clients’ review.
The following are questions and answers arising from that webinar:
QUESTION: I am representing a buyer who needs an interpreter. Do I need a written agreement with the interpreter to tour a property?
ANSWER: No. Interpreters are not visiting or touring property for the purposes of buying it.
QUESTION: Can we use the co-listing form for holding open houses within our own brokerage
ANSWER: Yes. Attached to this tip is an updated form to use within your own brokerage.
QUESTION: In completing disclosures, what if a seller does not know the answer to a question?
ANSWER: The Transfer Disclosure Statement and Seller Property Questionnaire are written in the format of asking for the seller’s awareness. For example, the questions generally start with, “Are you aware of?” If a seller is not aware of a condition, the seller can mark the box “No.” However, it is recommended that a listing agent provide a seller with the Disclosure Information Advisory (“DIA”). A seller is expected to have a reasonable understanding of the condition of the seller’s property. Therefore, a seller cannot claim ignorance when it is reasonably expected that the seller would have the information. For example, a seller cannot claim that they were unaware of drainage deficiencies if there is evidence of significant ponding water around the property after rains.
For more information on advising sellers regarding completing disclosures, see Weekly Practice Tip “Advising Sellers Regarding Completing the TDS and SPQ.”
QUESTION: Photographers sometimes create floor plans containing square footage. Sometimes we also have artist renderings or AI recreation showing square footage. Is this reliable? How should we provide this information to a buyer?
ANSWER: That information can be included on a Square Footage Advisory naming the source. In addition, agents should not rely on non-professionals’ opinions of square footage (i.e., photographers, graphic designers, or AI recreations). In quoting square footage, agents should only use reliable sources. Further, it is recommended that agents identify the source of the information when quoting square footage.
QUESTION: Is it an agent’s duty to search past listings for square footage and include it on the Square Footage Advisory?
ANSWER: It is not an agent’s duty to research the history of particular issues such as square footage. However, it is within the standard of care for an agent to review past information on the Multiple Listing Service, or in broker files on previous listings or transactions, to identify inconsistencies, such as square footage, bedroom or bathroom count, septic versus sewer representations.
QUESTION: If a buyer pays for an appraisal, doesn’t the appraisal belong the buyers?
ANSWER: Not necessarily. If an appraisal was done for the benefit of a lender, the appraisal generally belongs to the lender and not the buyer.
QUESTION: When representing a buyer, should I ask to see a copy of the appraisal? Is there liability associated with requesting to see it?
ANSWER: An appraisal contains significant and relevant information pertaining to a property. Buyers’ agents should recommend to buyers that they obtain a copy of the appraisal. It is helpful if the buyer’s agent obtains it. There will be no liability associated with obtaining an approval, so long as the buyers’ agent reviews it and identifies any potential inconsistencies or red flags for a buyer.
QUESTION: I am a licensed real estate agent associated with a real estate brokerage. I occasionally work with a staging company. How can I get more information regarding the new agreement with side businesses to limit liability?
ANSWER: BRM issued a tip and forms. Your broker or manager will have access to those forms.
QUESTION: If there is no property manager for a rental, should we do a move-in/move-out form with the tenant?
ANSWER: No, you can provide the MII or MOI forms to the tenant or property owner, but you should not be involved in undertaking the inspection or completing those forms. This action arguably crosses over from acting as the leasing agent for purposes of facilitating a lease into property management and opining on the condition of the property.
QUESTION: I am a listing agent and I showed my listing to a prospective buyer. That buyer does not have an agent. They have now asked me for disclosures, which I sent to them. At what point do I need a buyer representation agreement?
ANSWER: The best practice in the above situation would be to forward the disclosures to the buyer with a cover email that states “Per your request, I am sending you the disclosures on (Property address). As we discussed, I am not representing you.” If you wish to proceed with this buyer who is representing him/herself, ask the buyer to sign a Buyer Non-Agency Agreement” (form BNA on zipForms). A buyer representation agreement will be needed if you elect to work with the buyer as their agent.
Attachment: Co-Listing Agreement for Open Houses within same brokerage
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.