PROPOSED RULEMAKING
STATE REAL ESTATE COMMISSION
[49 PA. CODE CH. 35]
Agency
[30 Pa.B. 641] The State Real Estate Commission (Commission) proposes to amend Chapter 35 by amending §§ 35.201, 35.281, 35.283, 35.284, 35.287, 35.331--35.333 and 35.336, and adding §§ 35.292, 35.311--35.316 and 35.337 as set forth in Annex A.
A. Effective Date
The amendments will be effective upon publication of the final-form regulations in the Pennsylvania Bulletin.
B. Statutory Authority
The amendments are proposed under the authority of sections 606--606.6 and 608.1--608.4 of the Real Estate Licensing and Registration Act (act) (63 P. S. §§ 455.606--455.606f and 455.608a--455.608d).
C. Background and Purpose
This proposal implements the act of November 24, 1998 (P. L. 908, No. 112) (Act 112). Act 112 codified the duties of licensees generally, expanded the relationships which licensees may have with consumers, and delineated mandatory provisions in written agreements and sales contracts.
To provide the most guidance to licensees, the Commission has drafted its preamble in two sections. The first section organizes statutory and corresponding proposed regulatory provisions by subject matter. The second section provides substantive interpretations of various statutory provisions.
D. Description of Proposed Amendments
Organization
The proposed amendments track statutory language. For ease of reference, the first column contains the statutory citation, the second column contains the proposed regulatory citation and the third column contains the subject matter.
Statute Proposed Subject Matter Regulation § 455.201 § 35.201 Definitions § 455.606a(b)
§§ 455.606a(b)(2)--455.606a(b)(4)§ 35.281(a)
§ 35.281(b)Contracts in writing
Exceptions§ 455.606a(a)(13) § 35.283 Conflicts of interest § 455.606a
§§ 455.606a(h)--606a(i)§ 35.292(a)
§ 35.292(b)--(d)Duties of licensees
Exceptions§ 455.606
§ 455.606a(c)
§ 455.606a(d)
§ 455.606a(g)§ 35.311(a)
§ 35.311(b)
§ 35.311(c)
§ 35.311(d)Permitted relationships
Delegation
Exception
Confidentiality§ 455.606b
§ 455.606a(e)
§ 455.606a(b)(4) § 455.606§ 35.312(a)
§ 35.312(b)
§§ 35.312(c)--(d)
§ 35.312(e)Duties of seller's agents
Exception
Compensation
Status of licensees§ 455.606c
§ 455.606a(f)
§ 455.608(7)
§ 455.606§ 35.313(a)
§ 35.313(b)
§ 35.313(c)
§ 35.313(d)Duties of buyer's agents
Exception
Compensation
Status of licensees§ 455.606d
§ 455.606d
§ 455.606a(f)§ 35.314(a)
§ 35.314(b)
§ 35.314(c)--(d)Duties of dual agent
Exceptions
Consent§ 455.606e(a)(1)
§ 455.606e(a)(2)
§ 455.606
§ 455.606e(b)
§ 455.606e(a)(3)§ 35.315(a)
§ 35.315(c)
§ 35.315(d)
§ 35.315(f)
§ 35.315(g)Designation
Confidentiality
Status of licensees
Duties of Designated agent
Duties of broker§ 455.606f § 35.316 Transaction licensees § 455.608a § 35.331 Written agreements § 455.608b § 35.333 Agreements of sales § 455.608c § 35.337 Comparative market analysis Substantive Provisions
Current § 35.201 (relating to definitions), would be amended to include new definitions for ''agency relationship,'' ''buyer agent,'' ''consumer,'' ''designated agent,'' ''dual agent,'' ''listing broker,'' ''principal,'' ''seller's agent,'' ''subagent'' and ''transaction licensee.''
Interspersed throughout the regulations are numerous references to ''broker of record.'' Although the act refers to ''broker,'' the Commission understands that reference to be to the broker responsible for the real estate transactions and the supervision of the licensees. The Commission is cognizant that many real estate companies employ many brokers, but only one serves as a broker of record. As a result, the regulations distinguish between a broker and a broker of record.
Proposed § 35.281(a) (relating to putting contracts, commitments and agreements in writing) would contain the general rule that all sale or lease contracts, commitments and agreements wherein the consumer or principal is required to pay a fee be in writing and contain the information contained in § 35.331 (relating to written agreements generally.) Proposed subsection (b) delineates the exceptions to the general rule set forth in sections 606.1(b)(2)--606.1(b)(4) of the act.
Section 35.283 (relating to conflicts of interest) would be amended by clarifying subsection (d) and adding subsections (e) and (f) in conformity with section 606.1(a)(13) of the act. Under this new section, licensees are permitted to provide financial, title transfer, deed or document preparation, insurance, construction, repair and inspection to consumers so long as the consumer is provided with a written disclosure delineating the broker of record's or salesperson's financial interest. The disclosure must be provided at the time the referral is made. When there is no referral, the disclosure must be made when the broker of record or salesperson learns or should have learned of the conflict.
Section 35.284 (relating to preagreement disclosures to consumers), would be amended to delete current subsections (a) and (b) and replace them with the procedural requirements currently found in § 35.336(b)--(d) (relating to disclosure summary). These provisions are being moved so that the procedural requirements are placed in § 35.284 and the substantive requirements are placed in § 35.336. The information required by current subsections (a) and (b) are contained in the substantive provisions in the Consumer Notice in § 35.336.
Section 35.287 (relating to supervised property management assistance by salespersons), would be amended to delete current subsection (a), dealing with appraisals. This amendment would conform the regulation with the definitions of salesperson and broker of record in section 201 of the act, in that appraisals, other than a comparative market analysis described in section 608.3 of the act, have been removed from a real estate licensee's scope of practice.
New § 35.292(a) (relating to duties of licensees generally), would delineate the 12 duties owed to all consumers of real estate services. New subsections (b)--(d) identify the three areas where licensees are not required to act under section 606.1(h) and (i) of the act.
New § 35.311(a) would delineate the business relationships created by section 606 of the act. Subsection (b) would clarify that an agency relationship cannot be extended or delegated without the consent of the principal. Subsection (c) would clarify that an agency relationship is not created where another broker of record is compensated for assisting in the marketing and sale/lease of the property. New subsection (d) would contain the general rule that licensees may not knowingly reveal confidential information and the five exceptions to this rule.
New § 35.312 (relating to seller's agency) and new subsections (a)--(d) would track statutory language regarding additional duties and compensation. New subsection (e) stems from the requirement in section 606 of the act that employes of the broker of record bear the same relationship with the consumer as the broker of record unless the licensee has been named as a designated agent.
Similar to new § 35.312 is new § 35.313 (relating to buyer's agency). The additional duties delineated in section 606.3 are set forth in subsection (a). New subsections (b) and (c) of the act track the statutory requirement regarding showing competing properties and compensation. Like § 35.312(e), new subsection (d) stems from the requirement that employes of the broker of record bear the same relationship with the consumer as the broker of record unless designation has taken place.
Proposed § 35.314 would address dual agency and tracks the responsibilities mandated by section 606.4 of the act.
New § 35.315 would govern designated agency. In designated agency, a broker of record, with the consent of the principal, may designate one or more licensees to act exclusively as the agent for the seller/lessor and others to act exclusively on behalf of the buyer/lessee. Licensees who are not designated by the broker of record would have no agency relationship with either party in the transaction.
When designated licensees in the same company represent both parties to the transaction, designated agents would be subject to the duties imposed on all licensees generally, as well as the additional duties enumerated in new subsection (f). In this situation, the broker of record would assume the status of a dual agent and would be subject to the duties of licensees generally, the duties of dual agents and the additional duties specified in new subsection (g).
The Commission believes that it would be in the best interest of both the licensee and the consumer or principal, if designation were to take place at the time the principal enters into a written agreement. Nonetheless, the Commission acknowledges that there may be circumstances (that is, death, vacation, change of employment) when up-front designation may be impossible. In these instances, not only would the broker of record be required to use reasonable care to ensure that confidential information is not disclosed, but new subsection (b) would require the broker of record to obtain the principal's written consent for the newly designated licensee as well as the principal's agreement to renunciate a previous agency relationship.
The Commission also believes that to ensure that confidential information would not be revealed, brokers of record who permit designated agency in their offices, must develop clear company policy addressing these issues.
New § 35.316 tracks the language of section 606.6 of the act. Unlike buyer's agency, seller's agency and dual agency, the relationships between transaction licensees and consumers is not an agency relationship. Transaction licensees do not act as agents or advocates for the consumer. As such, transaction licensees do not owe consumers the general duty of confidentiality. Transaction licensees would only owe a limited duty of confidentiality for the information specified in subsection (b).
Section 35.331(a) (relating to written agreements generally), would be amended to track the mandatory provisions listed in section 608.1 of the act. New subsection (b) would clarify that the Consumer Notice may be incorporated by reference in the written agreement. The Commission believes that since some of the required information will be explained to consumers in detail at the initial interview, repetition would not be necessary.
Section 35.332(d) (relating to exclusive listing agreements), would be deleted. The Commission agrees with the predrafting suggestion of the Pennsylvania Association of Realtors that since the Commission's regulations do not provide sample agreements for all real estate transactions, this sample is unnecessary.
Section 35.333 (relating to agreements of sales), would be amended to track provisions of section 608.2 of the act and clarify the applicability of this provision to sales of cemetery lots, mausoleums or cremation spaces or openings.
Section 35.336(b) and (c) (relating to the disclosure summary), would be deleted as similar provisions are contained in § 35.284.
E. Compliance with Executive Order 1996-1
In compliance with Executive Order 1996-1, the Commission extended an invitation to the following boards, associations and interested licensees and educators to preliminarily review and comment on the Commission's draft regulatory proposal: Pennsylvania Association of Realtors; Realtors Educational Institute; Institute of Real Estate Studies; Polley Associates; Pennsylvania Cemetery and Funeral Association; Pennsylvania Bar Association; Allegheny Highland Association; Greater Allegheny-Kiski Area Board; Allegheny Valley Board; Beaver County Association; Bradford-Sullivan County Association; Bucks County Board; Butler County Association; Cambria-Somerset Association; Carbon County Association; Carlisle Association; Central Montgomery County Association; Central Susquehanna Valley Board; Central Westmoreland Board; Centre County Association; Chester County Association; Clearfield-Jefferson Association; Delaware Valley Realtors Association; East Montgomery County Association; Elk-Cameron County Board; Greater Erie Board; Fayette County Board; Franklin County Association; Greenville Area Board; Hanover-Adams County Association; Greater Harrisburg Association; Greater Hazleton Association; Huntingdon County Board; Indiana County Board; Lancaster County Association; Lawrence County Board; Lebanon County Association; Lehigh Valley Association; McKean County Association; Greater Meadville Board; Greater Mercer County Board; Mifflin-Juniata County Board; Mon Yough Association; Monongahela Valley Board; Greater Philadelphia Association; North Central Penn Board; Pike/Wayne Association; Pocono Mountains Association; Reading-Berks Association; Realtors Association of Metropolitan Pittsburgh; Schuylkill County Board; Greater Scranton Association; Tri-State Commercial and Industrial Association; Warren County Board; Washington-Greene Association; West Branch Valley Association; Westmoreland West Association; Greater Wilkes-Barre Association; York County Association; The Pennsylvania Federation of Housing Counselors and Agencies; and The Real Estate Consumer Council.
In formulating this proposal, the Commission reviewed and considered all comments and suggestions received by these and other interested parties during the regulatory development process.
F. Fiscal Impact and Paperwork Requirements
The proposed amendments should have no fiscal impact or additional paperwork requirement on the Commonwealth. This rulemaking would have a fiscal impact and additional paperwork requirement on the regulated community in that licensees would incur the cost of amending written agreements and sales contracts.
The proposed amendments should not necessitate legal, accounting or reporting requirements on the regulated community.
G. Sunset Date
The Commission reviews the effectiveness of its regulations on an ongoing basis. Therefore, no sunset date has been assigned.
H. Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on January 20, 2000, the Commission submitted a copy of this proposal to the Independent Regulatory Review Commission (IRRC) and the Chairpersons of the House Professional Licensure Committee and the Senate Consumer Protection and Professional Licensure Committee. In addition to submitting the proposal, the Commission has provided IRRC and the Committees with a copy of a detailed regulatory analysis form prepared by the Commission in compliance with Executive Order 1996-1, ''Regulatory Review and Promulgation.'' A copy of this material is available to the public upon request.
If IRRC has objections to any portion of the proposal, it will notify the agency within 10 days after the expiration of the Committees' review period. The notification shall specify the regulatory review criteria which have not been met by that portion. The act specifies detailed procedures for review, prior to final publication of the regulations, by the agency, the General Assembly and the Governor of objections raised.
I. Public Comment
Interested persons are invited to submit written comments, suggestions or objections regarding the proposed amendments to Judith Pachter Schulder, Counsel, State Real Estate Commission, 116 Pine Street, P. O. Box 2649, Harrisburg, PA 17105-2649, within 30 days of publication of this proposed rulemaking. Please reference No. 16A-568 (Agency), when submitting comments.
RITA HALVERSON,
ChairpersonFiscal Note: 16A-568. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 49. PROFESSIONAL AND VOCATIONAL STANDARDS
PART I. DEPARTMENT OF STATE
Subpart A. PROFESSIONAL AND OCCUPATIONAL AFFAIRS
CHAPTER 35. STATE REAL ESTATE COMMISSION
Subchapter B. GENERAL PROVISIONS § 35.201. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
* * * * * Agency relationship--A fiduciary relationship between a broker of record or licensees employed by a broker of record and a consumer who becomes a principal.
* * * * * Broker--An individual or entity that, for another and for a fee, commission or other valuable consideration, does one or more of the following:
* * * * * (iii) Manages [or appraises] real estate.
* * * * * (vi) Undertakes to perform a comparative market analysis.
(vii) Attempts to perform one of the actions listed in subparagraphs (i)--[(v)](vi).
* * * * * Buyer agent--A licensee who enters into an agency relationship with a buyer/tenant.
* * * * * Consumer--An individual or entity who is the recipient of any real estate service.
* * * * * Designated agent--One or more licensees designated by the broker of record, with the consent of the principal, to act exclusively as the agent or agents for the principal to the exclusion of all other licensees employed by the broker of record.
Dual agent--A licensee who acts as an agent for the buyer/tenant and seller/landlord in the same transaction.
* * * * * Listing broker--A broker of record who has entered into a written agreement with a seller/landlord to market property as a seller's agent, dual agent or transaction licensee.
* * * * * Principal--A consumer who has entered into an agency relationship with a broker of record or another licensee employed by the broker of record.
* * * * * Salesperson--An individual who is employed by a broker of record to do one or more of the following:
* * * * * (vii) Assist a broker in managing [or appraising] property.
(viii) Perform a comparative market analysis.
Seller's agent--A licensee who enters into an agency relationship with a seller/landlord.
Subagent--A licensee, not in the employ of the listing broker, who acts or cooperates with the listing broker in selling property as a seller's/landlord's agent.
* * * * * Transaction licensee--A licensee who, without entering into an agency relationship with the consumer, provides communication or document preparation services or performs other acts listed in the definition of ''broker'' or ''salesperson.''
Subchapter E. STANDARDS OF CONDUCT AND PRACTICE
GENERAL ETHICAL RESPONSIBILITIES § 35.281. Putting contracts, commitments and agreements in writing.
(a) [A licensee who acts in a representative capacity in connection with a real estate transaction shall ensure that] All sale or lease contracts, commitments and agreements [regarding the transaction that he has knowledge of, or that he reasonably should] between a broker of record, or a licensee employed by the broker of record, and a principal or a consumer who is required to pay a fee, commission or other valuable consideration shall be [expected to have knowledge of, are] in writing and contain the information specified in § 35.331 (relating to written agreements generally).
(b) [A licensee who enters into an oral open] The following are exceptions to subsection (a):
(1) Open listing [agreement shall provide] agreements may be oral if the seller or landlord is provided with a written memorandum stating the terms of the agreement.
(2) Transaction licensees or subagents cooperating with listing brokers are not required to obtain a written agreement from the seller/landlord.
(3) Transaction licensees or subagents who provide services to the buyer/tenant but are paid by the seller/landlord or listing broker shall provide, and have signed, a written disclosure statement describing the nature of the services and the fees to be paid.
* * * * * § 35.283. Conflict of interest.
* * * * * (d) A [broker] licensee who is engaged in the business of financing the purchase of real or personal property, [or of] lending money on the security of real or personal property, or providing title transfer, deed or document preparation, insurance, construction, repair or inspection services, may not require[, as a condition precedent to the activities, the negotiation by the buyer through a particular insurance company of a policy of insurance or the renewal of the insurance covering the property or the person involved, with the exception of a group creditor policy] a consumer to use any of these service.
(e) If the consumer chooses to use any of the services in subsection (d), the licensee shall provide the consumer with a written disclosure of any financial interest, including a referral fee or commission, that the licensee has in the service. The disclosure shall be made at the time the licensee first advises the consumer that an ancillary service is available or when the licensee first learns that the consumer will be using the service.
(f) A licensee has a continuing obligation to disclose to a principal any conflict of interest in a reasonably practicable period of time after the licensee learns or should have learned of the conflict of interest.
§ 35.284. Preagreement disclosures to [buyer and seller] consumers.
(a) A licensee shall [disclose the following information to a prospective client-seller at the initial interview before the seller enters into a listing agreement:
(1) Whether the broker is the agent of the seller or the agent of the buyer.
(2) The broker's commission and the duration of the listing period are negotiable.
(3) The existence of a Real Estate Recovery Fund to reimburse a person who has obtained a final civil judgment against a Pennsylvania real estate licensee owing to fraud, misrepresentation or deceit in a real estate transaction and who has been unable to collect the judgment after exhausting legal and equitable remedies. Details about the Fund may be obtained by calling the Commission at (717) 783-3658.
(4) The requirement that an agreement of sale executed by the seller shall contain the zoning classification of the property, unless the property (or each parcel thereof, if subdividable) is zoned solely or primarily to permit single-family dwellings] provide the disclosure summary in § 33.336 (relating to disclosure summary) to all consumers at the initial interview.
(b) A licensee shall [disclose the following information to a prospective buyer at the initial interview before the buyer enters into an agreement of sale:
(1) Whether the broker is the agent of the seller or the agent of the buyer.
(2) The existence of a Real Estate Recovery Fund to reimburse a person who has obtained a final civil judgment against a Pennsylvania real estate licensee owing to fraud, misrepresentation or deceit in a real estate transaction and who has been unable to collect the judgment after exhausting legal and equitable remedies. Details about the Fund may be obtained by calling the Commission at (717) 783-3658] provide a copy of the entire disclosure to the consumer and shall retain the signed acknowledgment for his records for 6 months, unless the consumer and the broker have entered into a business relationship. In this case, the records shall be retained under § 35.286 (relating to retention and production of records).
(c) If a consumer refuses to sign the acknowledgment, a licensee shall note the refusal on the acknowledgment and retain it as specified in subsection (b).
§ 35.287. Supervised [appraisal and] property management assistance by salespersons.
[(a) A salesperson may assist in the preparation of an appraisal by the employing broker or an associate broker, if the employing broker or associate broker:
(1) Directly supervises and controls the salesperson's work, assuming total responsibility for the contents of the appraisal documents and value conclusions. The salesperson may not arrive at an independent determination of value.
(2) Personally makes a physical inspection of the interior and exterior of the subject property.
(3) Signs the appraisal document as ''appraiser'' and has the salesperson sign as ''assistant to appraiser.''
(b)] A salesperson may assist in the management of real estate if the salesperson's work is directly supervised and controlled by the employing broker. The salesperson may not independently negotiate the terms of a lease nor execute a lease on behalf of the [lessor] landlord.
§ 35.292. Duties of licensees generally.
(a) The following duties are owed to all consumers of real estate services and may not be waived:
(1) Exercise reasonable professional skill and care.
(2) Deal honestly and in good faith.
(3) Present, in a timely manner, all offers, counteroffers, notices and communications to and from the parties in writing, unless the property is subject to an existing contract and the seller/landlord has agreed in a written waiver.
(4) Comply with the Real Estate Disclosure Act (68 P. S. §§ 1021--1036).
(5) Account for escrow and deposits funds as required by section 604(a)(5) of the act (63 P. S. § 455.604(a)(5)) and §§ 35.321--35.328 (relating to escrow requirements).
(6) Provide consumers with the disclosure summary in § 35.336 (relating to disclosure summary) at the initial interview.
(7) Disclose, in a timely manner, all conflicts of interest and financial interests as required in § 35.283 (relating to conflicts of interest).
(8) Advise the consumer to seek expert advice on matters about the transaction that are beyond the licensee's expertise.
(9) Ensure that all services are provided in a reasonable, professional and competent manner.
(10) Keep the consumer informed about the transaction and the tasks to be completed.
(11) Provide assistance with document preparation.
(12) Advise the consumer about compliance with laws pertaining to real estate transactions without rendering legal advice.
(b) A licensee is not required to conduct an independent inspection of the property.
(c) A licensee is not required to independently verify the accuracy or completeness of any representation made by the consumer to a transaction which the licensee reasonably believes to be accurate and reliable.
(d) A licensee is not liable for the acts of a consumer unless the consumer is acting at the express direction of the licensee or as a result of a representation by a licensee reasonably relied on by the consumer.
PERMITTED RELATIONSHIPS (Editor's Note: The text in §§ 35.311--35.316 is proposed to be added. It is being printed in regular print to enhance readability.)
§ 35.311. Generally.
(a) A licensee and a consumer may enter into the relationship specified in sections 606.2--606.4 and 606.6 of the act (63 P. S. §§ 455.606b--455.606d and 455.606f).
(b) A broker of record may not extend or delegate the broker of record's agency relationship without the written consent of the principal.
(c) Compensation paid by a broker of record to another broker of record who assists in the marketing and sale/lease of a consumer's property does not create an agency relationship between the consumer and that other broker of record.
(d) A licensee in an agency relationship may not knowingly, during or following, reveal or use confidential information of the principal, except when one or more of the following apply:
(1) The principal consented to the disclosure.
(2) The information is disclosed to another licensee or third party acting solely on behalf of the principal.
(3) The information is required to be disclosed under subpoena or court order.
(4) The disclosure is necessary to prevent the principal from committing a crime.
(5) The information is used by the licensee to defend in a legal proceeding against an accusation of wrongdoing.
§ 35.312. Seller's agent.
(a) In addition to the duties required in § 35.292 (relating to duties of licensees generally), a seller's agent owes the additional duties of:
(1) Loyalty to the seller/landlord by acting in the seller's/landlord's best interest.
(2) Confidentiality, except that a licensee has a duty to reveal known material defects about the property.
(3) Making a continuous and good faith effort to find a buyer/tenant for the property except when the property is subject to an existing agreement of sale/lease.
(4) Disclosure to other parties in the transaction that the licensee has been engaged as a seller's agent.
(b) A licensee does not breach a duty to a seller/landlord by showing alternative properties to a prospective buyer/tenant or listing competing properties.
(c) A seller's agent may compensate other brokers of records as subagents if the seller/landlord agrees in writing. Subagents have the same duties and obligations to the seller/landlord as the seller's agent.
(d) A seller's agent may also compensate a buyer's agent and a transaction licensee who do not have the same duties and obligations to the seller/landlord as the seller's agent.
(e) Upon entering into a written agreement with the seller/landlord, each licensee employed by the broker of record becomes a seller's agent unless a licensee has been named, or is thereafter named, a designated agent under § 35.315 (relating to designated agency).
§ 35.313. Buyer's agency.
(a) In addition to the duties required in § 35.292 (relating to duties of licensees generally), a buyer's agent owes the additional duties of:
(1) Loyalty to the buyer/tenant by acting in the buyer's/tenant's best interest.
(2) Confidentiality.
(3) Making a continuous and good faith effort to find a property for the buyer/tenant except when the buyer is subject to an existing contract for sale/lease.
(4) Disclosure to other parties in the transaction that the licensee has been engaged as a buyer's agent.
(b) A licensee does not breach a duty to a buyer/tenant by showing a property the buyer/tenant is interested in to other buyer/tenants.
(c) A buyer's agent represents the interests of the buyer/tenant even if paid by the seller/landlord.
(d) Upon entering into a written agreement with the buyer/tenant, each licensee employed by the broker of record becomes a buyer's agent unless a licensee has been named, or is thereafter named, a designated agent under § 35.315 (relating to designated agency).
§ 35.314. Dual agency.
(a) A licensee may act as a dual agent if both parties consent in writing.
(b) In addition to the duties required in § 35.292 (relating to duties of licensees generally), a dual agent owes the additional duties of:
(1) Taking no action that is adverse or detrimental to either party's interest in the transaction.
(2) Maing a continuous and good faith effort to find a buyer/tenant for the property and a property for the buyer/tenant, unless otherwise agreed.
(3) Confidentiality, except that a licensee is required to disclose known material defects about the property.
(c) A dual agent does not breach a duty to the seller/landlord by showing properties not owned by the seller/landlord to a prospective buyer/tenant or listing competing properties for sale/lease.
(d) A dual agent does not breach a duty to a buyer/tenant by showing a property the buyer/tenant is interested in to other prospective buyer/tenants.
§ 35.315. Designated agency.
(a) A broker of record, with the written consent of the principal, may designate one or more licensees to act exclusively as the agent of the seller/landlord, and designate one or more licensees to act exclusively as the agent of the buyer/tenant in the same transaction.
(b) Designation should take place at the time that the parties enter into a written agreement. Licensees may be designated after the initial designation or after a written agreement has been entered into, if the broker of record:
(1) Obtains the principal's consent, in writing, to the newly designated licensee.
(2) Obtains, when applicable, the principal's agreement to renunciate any previous agency relationship with the other licensees employed by the broker of record to the exclusion of other designated agents.
(c) Regardless of when the designation takes place, the broker of record and the designated agent shall use reasonable care to ensure that confidential information is not disclosed or used.
(d) The licensees employed by the broker of record who are not designated may not have an agency relationship with either party in the transaction.
(e) The broker of record may, provided there is a written company policy, authorize licensees employed by the broker of record to execute listing and agency contracts indicating themselves or affiliated licensees, or both, who are employed by the broker of record as the designated agents of the consumer.
(f) Each licensee employed by the same broker of record who is a designated agent in the same transaction, owes the following additional duties, in addition to those required in § 35.292 (relating to duties of licensees generally):
(1) Loyalty to the principal with whom the designated agent is acting by acting in that principal's best interest.
(2) Making a continuous and good faith effort to find a buyer/tenant for a principal who is a seller/landlord or to find a property for a principal who is the buyer/tenant except when the seller/landlord is subject to an existing contract for sale or lease or the buyer/tenant is subject to an existing contract to purchase or lease.
(4) Disclosure to a principal prior to writing or presenting an offer to purchase that the other party to the transaction is represented by a designated agent also employed by the broker.
(5) Confirmation that the broker of record is a dual agent in the transaction.
(g) In the transaction specified in subsection (f), the employing broker of record, as a dual agent, has the additional duties, in addition to those specified in § 35.292 and § 35.314 (relating to dual agents), of:
(1) Taking reasonable care to protect any confidential information disclosed to the designated licensees.
(2) Taking responsibility to direct and supervise the business activities of the designated licensees while taking no action that is adverse or detrimental to either party's interest in the transaction.
§ 35.316. Transaction licensee.
In addition to the duties required in § 35.292 (relating to duties of licensees generally), a transaction licensee shall advise the consumer that the licensee:
(1) Is not acting as an agent or advocate for the consumer and should not be provided with confidential information.
(2) Owes the additional duty of limited confidentiality in that the following information may not be disclosed:
(i) The seller/landlord will accept a price less than the asking/listing price.
(ii) The buyer/tenant will pay a price greater than the price submitted in a written offer.
(iii) The seller/landlord or buyer/tenant will agree to financing terms other than those offered.
REAL ESTATE DOCUMENTS § 35.331. [Listing] Written agreements generally.
(a) A [listing] written agreement [, of whatever type,] other than a sales agreement or contract, between a licensee and a principal, or between a licensee and a consumer whereby the consumer is or may be committed to pay a fee, commission or other valuable consideration may [state that] contain the following information printed conspicuously:
* * * * * (2) [Details about the Fund may be obtained by calling the Commission at (717) 783-3658.
(3)] Payments of money received by the broker of record on account of a sale--regardless of the form of payment and the person designated as payee (if payment is made by an instrument)--shall be held by the broker of record in an escrow account pending consummation of the sale or a prior termination thereof.
[(4)] (3) The [brokers] broker of record's commission and the duration of the [listing period] agreement have been determined as a result of negotiations between the broker of record, or a licensee employed by the broker of record, and the seller/landlord or buyer/tenant.
(5) The possibility that the broker of record or any licensee employed by the broker of record may provide services to more than one party in a single transaction, and an explanation of the duties owed to the other party and the fees which the broker of record may receive for those services.
(6) A description of the licensee's conflicts of interest and a method whereby the licensee will disclose future conflicts.
(7) In an agreement between a broker of record and a seller/landlord, the broker of record's policies regarding cooperation with subagents and buyers agents, a disclosure that a buyer agent, even if compensated by the broker of record or seller/landlord will represent the interests of the buyer/tenant and a disclosure of any potential for the broker of record to act as a dual agent.
(8) In an agreement between a broker of record and a buyer/tenant, an explanation that the broker of record may be compensated based upon a percentage of the purchase price, the broker of record's policies regarding cooperation with listing brokers willing to pay buyer's brokers, a disclosure that the broker, even if compensated by the listing broker or seller/landlord will represent the interests of the buyer/tenant and a disclosure of any potential for the broker of record to act as a dual agent.
(b) To the extent that any of the information required in subsection (b) is set forth in the disclosure summary in § 35.336 (relating to disclosure summary), those provisions need not be repeated, but may be incorporated by reference.
§ 35.332. Exclusive listing agreements.
* * * * * (b) An exclusive listing agreement shall contain, in addition to the requirements in § 33.331 (relating to written agreements generally):
* * * * * (2) The commission, fees or other compensation expected on the sale or lease price.
* * * * * § 35.333. Agreements of sale.
(a) An agreement of sale, other than for a cemetery lot, mausoleum or cremation space or opening, shall contain, conspicuously:
* * * * * (7) A statement [as to whether] identifying the capacity in which the broker of record, or a licensee employed by the broker of record is [the agent of the seller or the agent of the buyer] involved in the transaction and whether services have been provided to another party in the transaction.
* * * * * (d) [The requirements in subsection (a)(1)--(5) and (9) are applicable to an] An agreement of sale for a cemetery lot or plot or a mausoleum space or opening shall contain the requirements in subsection (a)(1)--(5) and (9).
§ 35.336. Disclosure summary.
[(a)] The Disclosure Summary shall be entitled ''Consumer Notice'' and shall be in the following format available from the Commission office upon request by phone, fax or internet.
* * * * * [(b) Licensees shall provide the disclosure summary to all consumers at the initial interview.
(c) Licensees shall provide a copy of the entire disclosure to the consumer and retain the signed acknowledgment for their records for 6 months, unless the consumer and the broker have entered into a business relationship whereby the records shall be retained under § 35.286 (relating to retention and production of records).
(d) If a consumer refuses to sign the acknowledgment, licensees shall note the refusal on the acknowledgment and retain it for their records as specified in subsection (c).]
§ 35.337. Comparative market analysis.
(a) A comparative market analysis shall contain the following statement printed conspicuously and without change on the first page:
This analysis has not been performed in accordance with the Uniform Standards of Professional Appraisal Practice which requires valuers to act as unbiased, disinterested third parties with impartiality, objectivity and independence and without accommodation of personal interest. It is not to be construed as an appraisal and may not be used as such for any purpose.(b) A licensee who is also licensed as an appraiser under the Real Estate Appraisers Certification Act (63 P. S. §§ 457.1--457.19) and who prepares a comparative market analysis that satisfies the Uniform Standards of Professional Appraisal Practice is not required to place the disclosure on the analysis.
[Pa.B. Doc. No. 00-216. Filed for public inspection February 4, 2000, 9:00 a.m.]
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