Understanding Dual & Designated Representation Disclosure Requirements

Disclosed Dual Representation (§ 54.1-2139.2.)

A Licensee may act as a Dual Representative only with the Disclosed written consent of all Clients to the transaction, in addition to the Disclosure of the Brokerage relationship.

Such disclosure may be given in combination with other disclosures or provided with other information, but if so, the disclosure shall be conspicuous, printed in bold lettering, all capitals, underlined, or within a separate box.

No cause of action shall arise against a Dual Representative for making Disclosures of Brokerage relationships. A dual representative does not terminate any brokerage relationship by the making of any such allowed or required Disclosures of Dual Representation.

In any real estate transaction, a Licensee may withdraw, without liability, from representing a Client who refuses to consent to a Disclosed Dual Representation thereby terminating the Brokerage relationship with such Client. Such withdrawal shall not prejudice the ability of the Licensee to continue to represent the other Client in the transaction or to limit the Licensee from representing the Client who refused the Dual Representation in other transactions not involving Dual Representation.

Designated Representatives (§ 54.1-2139.3.)

The provisions of HB 1907 also permit Disclosed Designated Representatives as specifically authorized by Virginia Code § 54.1-2139.3.  A Principal or Supervising Broker may assign different Licensees affiliated with the Broker as a Designated Representatives to represent different Clients in the same transaction to the exclusion of all other Licensees in the firm.

Other Designated Representatives Provisions:

  • Use of such Designated Representatives shall not constitute Dual Representation if a Designated Representative is not representing more than one Client in a particular real estate transaction.  However, the Principal or Broker supervising the transaction is considered a Dual Representative.
  • Designated Representatives may not disclose, except to the affiliated Licensee’s Broker, personal or financial information received from the Clients during the Brokerage relationship and any other information that the Client requests during the Brokerage relationship be kept confidential, unless otherwise provided for by law or the Client consents in writing to the release of such information.
  • Designated Representatives must be Disclosed in a real estate transaction.

Quick memory reference: Agency vs. Representative

  • Dual & Designated Standard Agency = Standard Agent or Limited Service Agent
  • Dual & Designated Representative = Independent Contractor (non-Agency relationship)

Disclosure Forms

Virginia law requires that Agency Disclosure be “conspicuous and printed either in bold lettering or all capitals, and shall be underlined or in a separate box.”

Here’s an example of language that meets the disclosure requirement:

BY ENTERING INTO THIS BROKERAGE AGREEMENT, THE UNDERSIGNED DO HEREBY ACKNOWLEDGE THEIR INFORMED CONSENT TO THE LIMITED SERVICE REPRESENTATION BY THE LICENSEE AND DO FURTHER ACKNOWLEDGE THAT NEITHER THE OTHER PARTY TO THE TRANSACTION NOR ANY REAL ESTATE LICENSEE REPRESENTING THE OTHER PARTY IS UNDER ANY LEGAL OBLIGATION TO ASSIST THE UNDERSIGNED WITH THE PERFORMANCE OF ANY DUTIES AND RESPONSIBILITIES OF THE UNDERSIGNED NOT PERFORMED BY THE LIMITED SERVICE REPRESENTATIVE.

 

VAR, in collaboration with forms providers from around the state, will provide revised forms to help you comply with changes to agency law.  These forms will be concise and user-friendly, and will also work to reduce the number of disclosure forms.

 

Author: Lee Gosselin, Associate Broker & Owner

 

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