| Section
1. Definitions. Defines the specific terms used in the law.
Section
2. Relationships between Licensees and the Public. States that
the licensee who works with a buyer or tenant represents that buyer or
tenant -- unless the licensee is the listing agent, a seller’s subagent,
a dual agent, the seller personally or the parties agree otherwise. Also
states that in a transaction involving two different licensees affiliated
with the same broker, the broker is a dual agent and each licensee solely
represents his or her client -- unless the parties agree in writing that
both licensees are dual agents.
Section
3. Duties of a Licensee Generally. Prescribes the duties that are
owed by all licensees, regardless of who the licensee represents. Requires
disclosure of the licensee’s agency relationship in a specific transaction.
Section
4. Duties of a Seller’s Agent. Prescribes the additional duties
of a licensee representing the seller or landlord only.
Section
5. Duties of a Buyer’s Agent. Prescribes the additional duties
of a licensee representing the buyer or tenant only.
Section
6. Duties of a Dual Agent. Prescribes the additional duties of
a licensee representing both parties in the same transaction, and requires
the written consent of both parties to the licensee acting as a dual agent.
Section
7. Duration of Agency Relationship. Describes when an agency relationship
begins and ends. Provides that the duties of accounting and confidentiality
continue after the termination of an agency relationship.
Section
8. Compensation. Allows brokers to share compensation with cooperating
brokers. States that payment of compensation does not necessarily establish
an agency relationship. Allows brokers to receive compensation from more
than one party in a transaction with the parties’ consent.
Section
9. Vicarious Liability. Eliminates the common law liability of
a party for the conduct of the party’s agent or subagent, unless the agent
or subagent is insolvent. Also limits the liability of a broker for the
conduct of a subagent associated with a different broker.
Section
10. Imputed Knowledge and Notice. Eliminates the common law rule
that notice to or knowledge of an agent constitutes notice to or knowledge
of the principal.
Section
11. Interpretation. This law replaces the fiduciary duties owed
by an agent to a principal under the common law, to the extent that it
conflicts with the common law.
Section
12. Effective Date. This law generally took effect on January 1,
1997.
 Section
1: 18.86.010. Definitions. Unless the context clearly requires
otherwise, the definitions in this section apply throughout this chapter.
(1) "Agency relationship"
means the agency relationship created under this chapter or by written
agreement between a licensee and a buyer and/or seller relating to the
performance of real estate brokerage services by the licensee.
(2) "Agent" means a licensee
who has entered into an agency relationship with a buyer or seller.
(3) "Business opportunity"
means and includes a business, business opportunity, and goodwill of an
existing business, or any one of the combination thereof.
(4) "Buyer" means an actual
or perspective purchaser in a real estate transaction, or an actual or
perspective tenant in a real estate rental or lease transaction, as applicable.
(5) "Buyer’s agent" means
a licensee who has entered into an agency relationship with only the buyer
in a real estate transaction, and includes subagents engaged by a buyer’s
agent.
(6) "Confidential information"
means information from or concerning a principal of a licensee that:
(a) was acquired by the licensee
during the course of an agency relationship with the principal;
(b) the principal reasonably
expects to be kept confidential;
(c) the principal has not disclosed
or authorized to be disclosed to third parties;
(d) would, if disclosed, operate
to the detriment of the principal; and
(e) the principal personally
would not be obligated to disclose to the other party.
(7) "Dual agent" means a
licensee who has entered into an agency relationship with both the buyer
and seller in the same transaction.
(8) "Licensee" means a real
estate broker, associate real estate broker, or real estate salesperson,
as those terms are defined in chapter 18.85 RCW.
(9) "Material fact" means
information that substantially adversely affects the value of the property
or a party’s ability to perform its obligations in a real estate transaction,
or operates to materially impair or defeat the purpose of the transaction.
The fact or suspicion that the property, or any neighboring property, is
or was the site of a murder, suicide or other death, rape or other sex
crime, assault or other violent crime, robbery or burglary, illegal drug
activity, gang-related activity, political or religious activity, or other
act, occurrence, or use not adversely affecting the physical condition
of or title to the property is not a material fact.
(10) "Principal" means a
buyer or seller who has entered into an agency relationship with a licensee.
(11) "Real estate brokerage
services" means the rendering of services for which a real estate license
is required under chapter 18.85 RCW.
(12) "Real estate transaction"
or "transaction" means an actual or prospective transaction involving a
purchase, sale, option, or exchange of any interest in real property or
a business opportunity, or a lease or rental of real property. For purposes
of this chapter, a prospective transaction does not exist until a written
offer has been signed by at least one of the parties.
(13) "Seller" means an actual
or prospective seller in a real estate transaction, or an actual or prospective
landlord in a real estate rental or lease transaction, as applicable.
(14) "Seller’s agent" means
a licensee who has entered into an agency relationship with only the seller
in a real estate transaction, and includes subagents engaged by a seller’s
agent
(15) "Subagent" means a
licensee who is engaged to act on behalf of a principal by the principal’s
agent where the principal has authorized the agent in writing to appoint
subagents.
Section
2. 18.86.020. Relationship Between Licensees and the Public.
(1) A licensee who performs
real estate brokerage services for a buyer is a buyer’s agent unless the:
(a) Licensee has entered into
a written agency agreement with the seller;
(b) Licensee has entered into
a subagency agreement with the seller’s agent;
(c) Licensee has entered into
a written agency agreement with both parties;
(d) Licensee is the seller or
one of the sellers; or
(e) Parties agree otherwise
in writing after the licensee has complied with section 3(1)(f).
(2) In a transaction in
which different licensees affiliated with the same broker represents different
parties, the broker is a dual agent, and must contain the written consent
of both parties as required under section 6 of this act. In such a case,
each licensee shall solely represent the party with whom the licensee has
an agency relationship, unless all parties agree in writing that both licensees
are dual agents.
(3) A licensee may work
with a party in separate transactions pursuant to different relationships,
including, but not limited to, representing a party in one transaction
and at the same time not representing that party in a different transaction
involving that party, if the licensee complies with this chapter in establishing
the relationships for each transaction.
Section
3. 18.86.030. Duties of a Licensee Generally.
(1) Regardless of whether
the licensee is an agent, a licensee owes to all parties to whom the licensee
renders real estate brokerage services the following duties, which may
not be waived:
(a) To exercise reasonable skill
and care;
(b) To deal honestly and in
good faith;
(c) To present all written offers,
written notices and other written communications to and from either party
in a timely manner, regardless of whether the property is subject to an
existing contract for sale or the buyer is already a party to an existing
contract to purchase;
(d) To disclose all existing
material facts known by the licensee and not apparent or readily ascertainable
to a party; provided that this subsection shall not be construed to imply
any duty to investigate matters that the licensee has not agreed to investigate;
(e) To account in a timely manner
for all money and property received from or on behalf of either party;
(f) To provide a pamphlet on
the law of real estate agency in the form prescribed in section 13 of this
act to all parties to whom the licensee renders real estate brokerage services,
before the party signs an agency agreement with the licensee, signs an
offer in a real estate transaction handled by the licensee, consents to
dual agency, or waives any rights, under section 2(1)(e), 4(1)(e), 5(1)(e),
or 6(2)(e) or (f) of this act, whichever occurs earliest; and
(g) To disclose in writing to
all parties to whom the licensee renders real estate brokerage services,
before the party signs an offer in a real estate transaction handled by
the licensee, whether the licensee represents the buyer, the seller, both
parties, or neither party. The disclosure shall be set forth in a separate
paragraph entitled "Agency Disclosure" in the agreement between the buyer
and the seller in a separate writing entitled "Agency Disclosure."
(2) Unless otherwise agreed,
a licensee owes no duty to conduct an independent inspection of the property
or to conduct an independent investigation of either party’s financial
condition, and owes no duty to independently verify the accuracy or completeness
of any statement made by either party or by any source reasonably believed
by the licensee to be reliable.
Section
4. 18.86.040. Duties of a Seller’s Agent.
(1) Unless additional duties
are agreed to in writing signed by a seller’s agent, the duties of a seller’s
agent are limited to those set forth in section 3 of this act and the following,
which may not be waived except as expressly set forth in (e) of this subsection:
(a) To be loyal to the seller
by taking no action that is adverse or detrimental to the seller’s interest
in a transaction;
(b) To timely disclose to the
seller any conflicts of interest;
(c) To advise the seller to
seek expert advise on matters relating to the transaction that are beyond
the agent’s expertise;
(d) Not to disclose any confidential
information from or about the seller, except under subpoena or court order,
even after termination of the agency relationship; and
(e) Unless otherwise agreed
to in writing after the seller’s agent has complied with section 3(1)(f)
of this act, to make a good faith and continuous effort to find a buyer
for the property; except that a seller’s agent is not obligated to seek
additional offers to purchase the property while the property is subject
to an existing contract for sale.
(2) A seller’s agent may
show alternative properties not owned by the seller to prospective buyers
and may list competing properties for sale without breaching any duty to
the seller.
Section
5. 18.86.050. Duties of a Buyer’s Agent.
(1) Unless additional duties
are agreed to in writing signed by a buyer’s agent, the duties of a buyer’s
agent are limited to those set forth in section 3 of this act and the following,
which may not be waived except as expressly set forth in (e) of this subsection:
(a) To be loyal to the buyer
by taking no action that is adverse or detrimental to the buyer’s interest
in a transaction;
(b) To timely disclose to the
buyer any conflicts of interest;
(c) To advise the buyer to seek
expert advice on matters relating to the transaction that are beyond the
agent’s expertise;
(d) Not to disclose any confidential
information from or about the buyer, except under subpoena or court order,
even after termination of the agency relationship; and
(e) Unless otherwise agreed
to in writing after the buyer’s agent has complied with section 3(1)(f)
of this act, to make a good faith and continuous effort to find a property
for the buyer; except that a buyer’s agent is not obligated to: (i) Seek
additional properties to purchase while the buyer is a party to an existing
contract to purchase; or (ii) show properties as to which there is no written
agreement to pay compensation to the buyer’s agent.
(2) A buyer’s agent may
show properties in which the buyer is interested to other prospective buyers
without breaching any duty to the buyer.
Section
6. 18.86.060. Duties of a Dual Agent.
(1) A licensee may act as
a dual agent only with the written consent of both parties to the transaction
after the dual agent has complied with section 3(1)(f) of this act, which
consent must include a statement of the terms of compensation.
(2) Unless additional duties
are agreed to in writing signed by a dual agent, the duties of a dual agent
are limited to those set forth in section 3 of this act and the following,
which may not be waived except as expressly set forth in (e) and (f) of
this subsection:
(a) To take no action that adverse
or detrimental to either party’s interest in a transaction;
(b) To timely disclose to both
parties any conflicts of interest;
(c) To advise both parties to
seek expert advice on matters relating to the transaction that are beyond
the dual agent’s expertise;
(d) Not to disclose any confidential
information from or about either party, except under subpoena or court
order, even after termination of the agency relationship;
(e) Unless otherwise agreed
to in writing after the dual agent has complied with section 3(1)(f) of
this act, to make a good faith and continuous effort to find a buyer for
the property; except that a dual agent is not obligated to seek additional
offers to purchase the property while the property is subject to an existing
contract for sale; and
(f) Unless otherwise agreed
to in writing after the dual agent has complied with section 3(1)(f) of
this act, to make a good faith and continuous effort to find a property
for the buyer; except that a dual agent is not obligated to: (i) Seek additional
properties to purchase while the buyer is a party to an existing contract
to purchase; or (ii) show properties as to which there is no written agreement
to pay compensation to the dual agent.
(3) A dual agent may show
alternative properties not owned by the seller to prospective buyers and
may list competing properties for sale without breaching any duty to the
seller.
(4) A dual agent may show
properties in which the buyer is interested to others prospective buyers
without breaching any duty to the buyer.
Section
7. 18.86.070. Duration of Agency Relationship.
(1) The agency relationships
set forth in this chapter commence at the time that the licensee undertakes
to provide real estate brokerage services to a principal and continue until
the earliest of the following:
(a) Completion of performance
by the licensee;
(b) Expiration of the term agreed
upon by the parties; or
(c) Termination of the relationship
by mutual agreement of the parties.
(2) Except as otherwise
agreed to in writing, a licensee owes no further duty after termination
of the agency relationship, other than the duties of:
(a) Accounting for all moneys
and property received during the relationship; and
(b) Not disclosing confidential
information.
Section
8. 18.86.080 Compensation.
(1) In any real estate transaction,
the broker’s compensation may be paid by the seller, the buyer, a third
party, or by sharing the compensation between brokers.
(2) An agreement to pay
or payment of compensation does not establish an agency relationship between
the party who paid the compensation and the licensee.
(3) A seller may agree that
a seller’s agent may share with another broker the compensation paid by
the seller.
(4) A buyer may agree that
a buyer’s agent may share with another broker the compensation paid by
the buyer.
(5) A broker may be compensated
by more than one party for real estate brokerage services in a real estate
transaction, if those parties consent in writing at or before the time
of signing an offer in the transaction.
(6) A buyer’s agent or dual
agent may receive compensation based on the purchase price without breaching
any duty to the buyer.
(7) Nothing contained in
this chapter obligates a buyer or seller to pay compensation to a licensee,
unless the buyer or seller has entered into a written agreement with the
licensee specifying the terms of such compensation.
Section
9. 19.86.090. Vicarious Liability.
(1) A principal is not liable
for an act, error, or omission by an agent or subagent of the principal
arising out of an agency relationship:
(a) Unless the principal participated
in or authorized the act, error, or omission; or
(b) Except to the extent that:
(i) The principal benefited from the act, error, or omission; and (ii)
the court determines that it is highly probable that the claimant would
be unable to enforce a judgment against the agent or subagent.
(2) A licensee is not liable
for an act, error, or omission of a subagent under this chapter, unless
the licensee participated in or authorized the act, error, or omission.
This subsection does not limit the liability of a real estate broker for
an act, error, or omission by an associate real estate broker or real estate
salesperson licensed to that broker.
Section
10. 18.86.100 Imputed Knowledge and Notice.
(1) Unless otherwise agreed
to in writing, a principal does not have knowledge or notice of any facts
known by an agent or subagent of the principal that are not actually known
by the principal.
(2) Unless otherwise agreed
to in writing, a licensee does not have knowledge or notice of any facts
known by a subagent that are not actually known by the licensee. This subsection
does not limit the knowledge imputed to a real estate broker of any facts
known by a real estate broker or real estate salesperson licensed to such
broker.
Section
11. 18.86.110. Interpretation. This chapter supersedes
only the duties of the parties under the common law, including the fiduciary
duties of an agent to a principal, to the extent inconsistent with this
chapter. The common law continues to apply to the parties in all other
respects. This chapter does not affect the duties of a licensee while engaging
in the authorized or unauthorized practice of law as determined by the
courts of this state. This chapter shall be construed broadly.
Section
12. 18.86.900. Effective Date. This chapter shall take
effect on January 1, 1997. This chapter does not apply to an agency relationship
entered into before January 1, 1997, unless the principal and agent agree
in writing that this chapter will, as of January 1, 1997, apply to such
agency relationship. |
