Notes from the MAR Legal Hotline

July 16, 2019

- By The MAR Legal Team

Q: Is sharing a lockbox code with a buyer client illegal?

A: No, it is not illegal for a REALTOR® to share a lockbox code with a buyer without the express permission of the seller, but it is likely a violation of the REALTORS® Code of Ethics. Article 3 of the Code of Ethics places a duty on all REALTORS® to cooperate with other brokers except when cooperation is not in the client’s best interest. Standard of Practice 3-9 explicitly states that “REALTORS® shall not provide access to the listed property on terms other than those established by the owner or the listing broker.”

When a buyer agent schedules a showing for a property and is provided access information to the property, it is that agent’s responsibility to ensure that information is used appropriately. Sharing that information without the permission of the seller may not only expose that REALTOR® to an ethics complaint but may also jeopardize that agent’s commission in that the listing agent may dispute whether that agent was the procuring cause in the transaction. A listing agent who shares access information with an unlicensed individual may be breaching their fiduciary duties to their sellers. Sharing this information is likely a violation of the Duty of Loyalty and Reasonable Care. An agent must always act in the best interests of their client and sharing this type of information with an unlicensed individual, places the safety of the seller and their belongings at risk.

Q: My seller has a home security system on the property I have listed. Do I have to disclose this to potential buyers and their agents?

A. Yes, Massachusetts requires two-party consent for all audio recordings. Recording another individual without their consent may subject you and your seller to criminal and civil penalties. Home monitoring devices such as Google Home, Arlo, Nest, and Ring Doorbell, among others, have all become commonplace. It is extremely important to have a conversation regarding these devices with your sellers prior to listing a property. If a seller has a recording device on the property and intends to have the device active during showings and open houses, they must disclose this fact to any individual who enters the property and is thus subject to recording.

Consent may be obtained in writing, or through a proper notice which allows an individual to decline being recorded before they are subject to recording. Listing agents should place a notice in the MLS indicating that showings and open houses may be recorded. Additionally, a notice should be placed on the property indicating that there are recording devices. Unlike an agency disclosure sign at an open house, a placard on the countertop will not suffice as proper notice because the individuals are likely already being recorded. To assist you in navigating this issue, MAR has developed a new form, Notice of Recording, that may be included with the MLS listing. We have also updated the listing agreements to include a provision under the “Seller’s Duties and Responsibilities” for the seller to disclose whether they have any recording devices on the property and whether they record video, audio, or both video and audio. These updates will be added to our forms library soon!

Q: An unrepresented buyer came to an open house and wants me to help them submit an offer, but my seller will not consent to Dual Agency – how do I proceed?

A: As an agent of the seller, you owe the seller duties of obedience, loyalty, disclosure, confidentiality, accountability, and reasonable care and due diligence. You do not have an agency relationship with the buyer unless the seller consents to dual agency. If your office practices designated agency, another agent in the office may be appointed as a designated agent with the consent of both the buyer and the seller. If one, or both, parties do not consent to dual or designated agency, you are limited to working with that buyer as a customer.

In this scenario, you must provide the unrepresented buyer with a Mandatory Agency Disclosure stating that you are a representative of the seller. You may assist the buyer with filling out a Contract to Purchase, but you may not provide the buyer with advice or recommendations pertaining to the terms of the offer.

The information and services provided through the Massachusetts Association of REALTORS® is intended for informational purposes and does not constitute legal advice, nor does it establish an attorney-client relationship. The Massachusetts Association of REALTORS®, by providing this service, assumes no actual or implied responsibility for any improper use of responses to questions through this service. The Massachusetts Association of REALTORS® will not be legally responsible for any potential misrepresentations or errors made by providing this service. For more information regarding these topics authorized callers should contact the MAR legal hotline at 800-370-5342 or e-mail at legalhotline@marealtor.