Does my firm need copies of my buyer agency records even if my client’s offer is not accepted?
QUESTION: I have been in real estate for over 10 years and am now with my third company. I have never had to turn in buyer agency forms to my broker-in-charge unless my buyer client actually entered into a contract to purchase property. My new company is insisting that I turn in a Buyer Agency Agreement and a Working With Real Estate Agents brochure even if my client’s offer is rejected. Is there any obligation for me or my firm to retain records like that even when there is no completed transaction?
ANSWER: Subsection (i)(5) of the Real Estate Commission’s broker-in-charge rule (A.0110) states that a broker-in-charge shall assume the responsibility for “the retention and maintenance of records relating to transactions conducted by or on behalf of the firm at such office” including those records required to be retained pursuant to the Commission’s record retention rule (A.0108).
The language of the record retention rule also speaks in terms of “transactions”. It states: “Brokers shall retain records of all sales, rental, and other transactions conducted in such capacity, whether the transaction is pending, completed or terminated prior to its successful conclusion.”
But what if your records don’t relate to a transaction, but merely to a relationship that resulted in an unaccepted offer? In the published materials for its 2012-2013 broker-in-charge annual review, the Real Estate Commission made it clear that the buyer agency records still need to be retained. The course materials expressed the requirement this way: “If the company is acting as a buyer/tenant agent, a broker-in-charge should never see a transaction file that has 1 or more offers in it, but no written buyer/tenant agency agreement. (If that happens), the broker-in-charge should immediately confer with the agent handling the transaction to correct the omission. Failure to do so may result in disciplinary action against both the individual agent and the broker-in-charge, as well as possible forfeiture of any commission.”
The bottom line is that your broker-in-charge has an obligation to confirm that all of the agents in your office are getting a Working With Real Estate Agents brochure signed each time there is “substantial contact” with a prospective buyer or seller. Similarly, your BIC must insure that written agency agreements are in place in a timely fashion, even if no transaction ever results from the agent’s efforts. The only way to meet these requirements is to require buyer agency records to be retained, even in the absence of any signed purchase or lease agreement.
This article is intended solely for the benefit of NC REALTORS® members, who may reproduce and distribute it to other NC REALTORS® members and their clients, provided it is reproduced in its entirety without any change to its format or content, including disclaimer and copyright notice, and provided that any such reproduction is not intended for monetary gain. Any unauthorized reproduction, use or distribution is prohibited.