Effective August 1st, 2024, the Real Estate Consumer Protection Enhancement Act is in effect. Its purpose is to provide increased protection and clarity to buyers, sellers and renters using real estate agents in residential real estate transactions.
Key Takeaways for Buyers and Sellers:
- Sellers’ Property Condition Disclosure. The purpose of this requirement is to provide buyers with important property condition information before they are contractually obligated on a purchase. Sellers should receive this form from their agent to complete and buyers should receive the completed form through their agent for review.
- Designated Agency. This provision allows a managing brokerage to appoint an agent within the listing office to represent buyers if buyers do not already have an agent. Sellers’ agent and buyers’ agent then each have a fiduciary duty to their own client.
- Brokerage Services Agreements. This provision requires that a written agreement be in place between a brokerage and the client clarifying the agent’s responsibilities, obligations and compensation structure. This is a big change for buyers! Sellers are accustomed to having an agreement in place with their listing agent, but buyers must now also have a written agreement in place with their agent. A Brokerage Services Agreement is NOT required for buyers to see a property at an open house, but it IS required if buyers ar requesting a scheduled showing of a property.
- Open House Disclosures. This provision requires that a selling agent post a clear disclosure of their representation of sellers at open houses.
- No Fee Disclosure on MLS. This provision prevents sellers’ agent from including the commission fee to be paid to the buyers’ agent on the MLS listing for the property. Buyers should be aware of their agent’s compensation structure – as set out in their Brokerage Services Agreement – to understand who will be responsible for paying the sellers’ agent and buyers’ agent commissions for a specific property.
- Continuing Education. Real estate agents are now required to complete continuing education and specifically with regard to their duties and obligations as an agent.
Key Takeaway for Renters:
Brokerage Service Agreements. If a renter is requesting a scheduled, private showing of a listed rental property, the agent must obtain a Brokerage Services Agreement. This must be a written agreement clarifying the agent’s responsibilities, obligations and fee structure.