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Legal Hotline Attorney Vern Jarboe answers frequently asked questions from Kansas REALTORS® about their transactions.
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License Law - Obligation to Present Offers
Question: You have a situation where a bank has a particular addendum required.
Answer: Failure to have all of the addenda required by a particular party would inherently present a counter-offer situation. All offers have to be presented even if the bank indicates that a required addendum is missing then the offer needs presented so that the bank can respond. It is really no different than a seller indicating to the Realtor® "don't bring any offers at less than _________." All offers still need to be presented.
Ethics - Procuring Cause
Question: You asked a question about the position of a buyer agent where after an offer is rejected the buyer goes directly to the listing agent.
Answer: On the hotline we are not in a position to comment on procuring cause questions. The proper forum for resolving such questions is arbitration at your local board level. Procuring cause answers are derived from looking at who initiated the unbroken chain of events that leads to a transaction. On that basis, evaluating the reason the buyer left the conversation with the buyer agent and went straight to the listing agent is where the answer would be found.
Contract - MLS Data and Copyright
Question: You asked about how information that is contained within the MLS is protected.
Answer: Each MLS needs to file its own copyright with the Patent and Trademark office to preserve its rights. A failure to preserve the rights would leave you without the option of suing someone who misuses your copyrighted information. The various comment fields in the MLS are owned by the original author unless those rights have been assigned to the Board. This can be accomplished by having the seller assign any copyrighted information to the listing broker who in turn assigns his or her rights to the MLS via the agreement they have with the MLS.
Contract - Modified Commission
Question: You have a situation where a bank seems to be trying to reduce commissions even though recent regulation changes at the national level prohibit that conduct.
Answer: In the interest of the parties it is important for you to go ahead and get the transaction closed. Probably your only remedy in this circumstance would be to go to the banking commissioner or federal regulators.
License Law - Commercial Real Estate
Question: You asked about the management of a commercial strip shopping center.
Answer: No real estate licenses required for management if management is limited to receipt of monies, paying the bills and doing an accounting. However, if commercial lease negotiations will be conducted then that requires a real estate license. Payment for licensed activities must flow through the real estate broker.
Listing Property as Available
Question: You have a situation where an auctioneer member wants to put property on the MLS at a price that is not reflective of what the seller would take. Rather, the price is intended merely to attract interest in the property.
Answer: It seems to me that this is a violation of the ethics rules which require the advertising of property through a true picture. To indicate a price which you know up front the seller will not take seems to me a violation of this rule. It also would violate the license law rule about false advertising.
License Law - Advertising By Client
Question: You have a situation where you have a property listed and the owner put it out on Craig's List without your permission or knowledge. The price on Craig's List is different than that shown in your listing information.
Answer: You are not responsible for the independent acts of your client. Now that you know, it would be a good idea to ask them to take it down because of the confusion created by multiple offerings on the same property. You need to let them know that a consumer contacting you off of Craig List will not know about your listing and you will not know the source of the call and it could cause you to misrepresent the property.
Contract - Negotiations in Short Sale Issue
Question: You have a situation where you are the listing agent on a short sale transaction. The transaction has been completely negotiated and now the buyer has asked for repairs.
Answer: If pursuant to the terms of the contract the buyer has the right to inspect and ask for repairs, then you simply have to present the offer. Obviously, this may cause the matter to blow up because in a short sale environment the lender usually has made their maximum reduction in price and contribution to the transaction.
License Law - Offer of Referral Fee from Loan Modification
Question: You have a situation where your firm has been offered referral fees from refinancing and loan modifications referred to a third party company.
Answer: These would be illegal kickbacks under the Real Estate Settlement Procedures Act. It would also violate the license law if we assume you are otherwise engaged in real estate transactions so that you would be getting paid from more than one part of the transaction.
Miscellaneous - Removal of Neighbors Property
Question: You have a situation where some type of debris was placed on one of your client's property. The property was placed there by a neighbor. The County is now requiring removal.
Answer: You should refer your client for independent legal advice before they do anything with someone else's personal property. Generally speaking, a letter to the owner of the property telling them it will be removed and disposed of is probably sufficient but the risk of being wrong is too great to make a guess on such subjects.
