10.57 Interfering with Agency Relationships

Company policy is not to interfere with existing agency relationships. For example, a licensee cannot use the multiple listing service information of those sellers listed in a certain geographic area as the specific target of a solicitation or communication.

The general rule is that an agent may not solicit a listing that is currently listed exclusively with another agent. However, if the listing agent refuses to provide the expiration date of the listing when asked by a competing licensee, the licensee can contact the listing agent’s client for the purpose of securing the listing expiration date. They can also discuss the terms under which a future listing might be taken or can even take a listing effective upon the expiration of the exclusive listing of the current listing agent. This same principle applies to buyers or tenants that are currently under contract with a licensee.

If the client of a REALTOR® contacts a competing REALTOR® during the term of an existing exclusive agency relationship to discuss the same type of service currently being provided by a REALTOR®, the competing REALTOR® may discuss the terms under which they would enter into a future agreement or can enter into an agreement which becomes effective upon the expiration of the existing exclusive agreement. The competing REALTOR® can take these actions only if that REALTOR® did not directly or indirectly initiate the discussions. Document this scenario well if it occurs.

Clients who have worked with a REALTOR® on prior engagements can be contacted by a competing REALTOR® for future business.

Prior to entering into an agency relationship with a client, a REALTOR® must take affirmative steps to be assured that the client is not currently subject to a valid exclusive agreement to provide the same type of real estate services with another agent. This rule is often ignored. For example, a licensee holds an open house and an individual visits the open house. The licensee under this rule has an obligation to inquire if the individual is engaged in an agency relationship with another licensee prior to drawing the individual into a conversation relating to the property or other properties that might fit the desired parameters of that individual.

Similarly, on unlisted properties, an agent must disclose his/her status as a buyer’s agent to the seller at first contact and again disclose that relationship in writing no later than the execution of any purchase and sale agreement. If the buyer’s agent desires to be compensated by the seller for any potential sale, the agent must make the request for such compensation at the first contact.

An agent acting as the agent of a seller must disclose that relationship to the buyer as soon as practical and provide written confirmation of such disclosure to the buyer no later than the execution of any purchase agreement.

Once a client, whether a seller or a buyer, is in an agency relationship with a licensee, all dealings with that individual must be conducted through their agent. There are two exceptions to this rule;

1. The client’s agent consents to direct contact with the client.

2. The client initiates direct dealings.

No compensation shall be offered, either directly or indirectly, to any affiliated licensee of the managing broker without the prior knowledge and consent of the managing broker.

A subagent of a seller, who is working with a buyer or a buyer’s broker, cannot use the terms of the offer to purchase to attempt to modify the listing broker’s offer of compensation to the subagent or buyer’s broker or make an offer to purchase contingent on the listing broker’s agreement to modify the offer of compensation.

Example: In order to secure the balance of the commission, Brian has his buyer make his offer subject to Brian receiving a 2.5% fee. This practice is prohibited by the REALTOR® Code of Ethics Standards of Practice as it would in essence be an attempt to force a modification of the listing agent’s offer of compensation to the cooperating agent.

An agent may not place any sign or notice on a property for sale or lease without the consent of the seller/landlord.

An agent contemplating terminating the relationship with his/her managing broker may not induce clients to cancel exclusive contractual agreements between the client and the firm and rewrite them after the move. However, the managing broker can establish agreements with affiliated licensees that address when the managing broker will consent to a departing affiliated licensee asking a client to follow that licensee in the event they terminate their relationship with the managing broker and either go out on their own or join another brokerage.

A licensee may not interfere with any existing agency relationship established between another licensee and their client.