By Beau R. Pichon
On October 1st, revised agency laws will take effect in Maryland that will change the way Realtors do business in the state. Maryland House Bill 1469, signed by the governor in April, will make several substantive changes to current law.
First, there will no longer be a presumption of buyer agency. Currently, when an agent who is not affiliated with the listing agent of a property assists a potential buyer with locating or viewing that property, the agent is presumed by law to be acting as the buyer’s agent. Under the revised law, that agent will now be considered a subagent of the listing agent, and will be required to disclose that fact to the potential buyer. Alternatively, the agent may enter into a written brokerage agreement with the potential buyer and will then be an exclusive buyer’s agent. The legislature’s hope is that, when buyers are informed up front that they will not be represented, they will choose to enter into written buyer agency agreements earlier than they do under the current law.
Second, when conducting an open house, listing agents will no longer be required to provide all potential buyers with written agency disclosure forms immediately upon entering into a discussion regarding the property. The legislature felt that this disclosure requirement was too cumbersome as it often led to dozens of disclosure forms being prepared and executed in a very short amount of time. Going forward, the Maryland Real Estate Commission will provide brokers with agency disclosure signs that agents may conspicuously display at all open houses.
Finally, the revised law will decrease the number of agency disclosure forms required in most transactions. Under the current law, any time an agent interacts with another party to a transaction, the agent must provide that party with an agency disclosure form. The revised law will now require the agency disclosure forms be given only to unrepresented parties. So, for instance, a buyer’s agent will no longer need to provide an agency disclosure form to a represented seller.
It appears that these changes should have a significant positive impact on the daily lives of Maryland Realtors. And the legislature’s push to have all agency relationships covered by written agreements is commendable. As always, of course, these changes will take some getting used to. And if you haven’t taken your mandatory agency CE class recently, now may be the perfect time!