We received this question and thought that the answer might be interesting for all to consider: “If a buyer client becomes interested in a property listed with my firm, can I change our buyer agency relationship (with their agreement) to facilitation so my office doesn’t have to practice dual agency?”
While the current law in Massachusetts does not explicitly prohibit this situation, it is not recommended by legal counsel. There are several factors that you need to consider if contemplating reducing or withdrawing your promise of representation to a client. First, bear in mind that when you agree to serve as a buyer’s agent, you agree to become a fiduciary of the buyer – in this way you’ve legally promised them Obedience, Loyalty, Disclosure, Confidentiality, Accounting for Funds, Reasonable Care and Diligence (OLDCAR). If an agent (or agency) decides to withdraw the promises made to their client in order to advance their own best interest or for the best interest of a competing client (the seller), there may a claim made of breach of fiduciary duties.
Can you claim to work in a client’s best interest if you’re willing to dump then as soon as it becomes inconvenient?? If another party in the transaction may benefit? And will a court of law agree with you?
Changing the relationship in such a manner may be confusing to the client, and the risks of inadvertently disclosing confidential information learned during the buyer agency are high. It is strongly recommended that if an agent and buyer are considering altering a previously agreed upon relationship, the agent first gets their broker’s guidance and instruction. The agent must receive written, informed consent from the client that clearly explains a change in roles. Additionally, the agent would need to execute a new agency disclosure form for that specific property. Since the Mandatory Agency Disclosure form does not have a line for the property address, this will need to be added by the agent. Additionally, the agent would have to disclose to the seller clients that the firm previously represented the buyer and has confidential information learned during that relationship that cannot be disclosed to the seller. You are bound to maintain confidentiality even after your relationship terminates.
Remember, representation is a sacred promise made between two parties. One party can’t dictate the terms of the relationship – it must be mutually understood and agreed upon. And, all agents must always work in the best interests of their clients in all dealings. The promises made should not be taken lightly, and should not be something that you consider changing without considerable care.
Thanks to Catherine Taylor, MAR Legal Counsel and Peter West, realtor for Redstones in Willenhall for weighing in on this subject.