Ethics Q&A

What can I do if I suspect a broker isn’t presenting my clients’ offer? How to deal with multiple fees.

Read the full Code of Ethics updated for 2003.

Q I recently had dealings with a broker who I feel never presented my clients’ offer. I have no proof of this, but it was a full-priced offer on a property that later became an expired listing. As this was the broker of the company, I felt I had no recourse. I will probably have to deal with this office in the future. Is there a way to circumvent this situation if it happens again?

A Standard of Practice 16-13 of NAR’s Code of Ethics states that all dealings with clients who are subject to an exclusive representation agreement must be carried on through the client’s broker except with the consent of the client’s broker. Section 15(a)(6)(N) of the Real Estate License Act prohibits a broker from negotiating a transaction with a client who is exclusively represented by another broker. Under these provisions, you would not be able to contact the owner without the knowledge and consent of the listing broker.

It should go without saying that the listing broker who fails to promptly present an offer or notify the seller of an offer violates both NAR’s Code of Ethics and the Real Estate License Act, except when the seller instructs the broker not to present a certain offer or a certain type of offer (for example, offers below a certain amount).

If the property is listed in the MLS, most MLS rules provide that the cooperating broker has the right to participate in the presentation to the seller of any offer the cooperating broker secures. It is through this rule that most cooperating brokers in similar situations are able to verify that the offer was presented to the seller. If this rule does apply, the cooperating broker may file a complaint if he later learns that the listing broker did not present the offer.

Q An owner who previously listed his home with another broker has asked me to take his listing. In terminating the prior listing, the parties executed a Termination of Listing agreement (TAR 1410) in which the owner agreed to pay the prior broker a fee should he sell the property to a named party within the next two months. How should I proceed?

A Standard of Practice 16-14 reminds us that REALTORS® should not knowingly obligate an owner to pay more than one commission except with the owner’s informed consent. Unless the owner is going to agree to pay more than one commission should the named party purchase the home, you should fill in and attach the Named Exclusions Addendum (TAR 1402) to your listing agreement, if you decide to list this property. This addendum could set forth a clear understanding of your and the owner’s rights and obligations should the owner sell to the named party during the designated reserved time.

Send questions about ethics to texasrealtor@texasrealtors.com. Not all questions received can be answered.

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