Informed Consumers · Selling · Training


The Agency relationship we share with our Clients has evolved significantly over the years and continues to take shape.  Whether you contribute these evolutions to the use of advancing technology, the changing needs and mindset of consumers, and/or as a response to lessons in history, there is no denying that the Real Estate industry needs an overhaul.

One consistent shift we continue to see each year is the focus on narrowing broad legal languages and structures regarding Agency & Disclosure.  The result has been an ethically strengthened industry and more standardize processes.

Agency representation hasn’t always been what it is today.  For example, can you imagine our industry without Buyer representation?  You might be surprised to learn that not so long ago Agency representation in Virginia only extended to Seller’s.  In fact, in the 1970’s the accepted practice for most states were the National standards, which only offered a blanket unilateral sub-agency.  This meant that all cooperating agents worked for the Seller and Listing agent.

What did this mean for the buyer?  Well, they were left to embrace the concept of Caveat Emptor, a Latin phrase meaning “Let the Buyer beware”.  However, the growing issue with sub-agency was that Buyers were given the impression that “their” best interests were represented by “their” agent.  As confusion regarding representation continued, state regulatory agencies found themselves facing significant legal problems, and the conflict and demand for equal representation could no longer be ignored.

The 1980’s created the first signs of the great divide of our real estate industry and despite the resistance from traditional brokers, Buyer Agency was born.  States began to define Agency relationships and passing mandatory Disclosure laws and regulations.  However, it wasn’t until 1992 when NAR made significant revisions to their MLS policies that made unilateral offer of sub-Agency optional, rather than mandatory.

Virginia General Assembly followed suit very shortly after in 1995, by passing Article 3 of Title 54.1 of Chapter 21, serving to protect the public by requiring Agency relationship Disclosure and forming the framework as to what activities would require Disclosure and when Disclosure would be due.  Since this 1995 amendment Disclosure of the Agency relationship has be required and must be given upon certain triggers, usually very early on in the relationship.  Prior to this Virginia Code creation, Agency and Disclosure imposed on Licensees were only broadly defined by Common Law.

Since then several revisions have been made to improve the legal structure and define the various different types of Agency.  To include: providing clarity regarding the differences between Client and Customer, creating limitations on Agency liability regarding misrepresentation, and to structure the Agency Duties to be performed by the Licensee within the different Agency relationships.  However, the core principle of Article 3 of Title 54.1 requires the Licensee to work in the best interests of their Client, above anyone else, including their own.

Other types of Agency relationships have been created and amended over the years in Virginia.  However, the last major Virginia Agency revision was with the adoption of the Limited Service Representative in 2006.  This addition provided real estate professional to offer Buyer’s and Seller’s with “Al La Carte” real estate service options.  Accordingly to Virginia Law, a Limited Service Representative would allow a Licensee to not provide one or more of the duties required of a Standard Agent.  HB 1907 makes several adjustments to this 2007 amendment.

The Agency relationship and our responsibilities and duties defined within are not only the law, but also the very core of our profession as real estate professionals.  We have an obligation to safe guard public interests as well as to treat our clients, customers, and one another as colleagues, with fair and honest dealings.  Failure to abide and perform our Fiduciary Duties could result in civil liability and/or disciplinary action by VREB, to include monetary fines and/or loss of licensure.

Author: Lee Gosselin, Associate Broker & Owner


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