POCONO Realtor | Pennsylvania Business Relationship Law

Its the law!...

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Act 112 became Pennsylvania Law on November 25, 1999. It provides for widespread changes for both real estate licensees and consumers. The now required 'Consumer Notice' informs the consumer (buyer or seller) of the business relationships that are permitted between real estate licensees and consumers. The licensee must present the 'Consumer Notice' to the consumer and seek his or her acknowledgement of its receipt before beginning any 'substantive' conversations regarding real estate. And, the consumer and licensee must then agree in writing as to the 'business relationship' that will exist between them before proceeding further. It's the law!

Details:

There is a 'two-form' requirement:

The first form is the 'Consumer Notice'. Specifically mandated by the new law, it is an informative document that creates no obligation upon the consumer. A real estate licensee can be severly penalized if unable to produce a signed copy upon demand of the Real Estate Commission. This notice must be presented to all consumers without exception. A consumer who refuses to sign the notice, should not expect any services from a real estate licensee who follows the law.

The second form is an 'agreement' between the consumer and the real estate licensee as to the business relationship that will exist between them. While a 'fill in the blanks' form has been provided for convenience by the Pennsylvania Association of REALTORS®, there is no mandated form. A simple memorandum signed by both licensee and consumer will do as long as it contains those statements required by the new law and specifies the business relationship.

The new law is designed to protect consumers. Many buyers believe when they call a REALTOR® (or licensee) advertising a property for sale, that the agent is representing them. But, the REALTOR® (or licensee) is representing the seller! The new law requires presentation of the Consumer Notice (to educate the consumer) and if the REALTOR® (or licensee) represents the seller, that must be disclosed immediately to the buyer in writing. When a REALTOR® (or licensee) represents the seller, the REALTOR® (or licensee) is obligated to seek the highest price and provide the seller with any information learned from the buyer that will be to the seller's advantage. An informed buyer would be wise to seek a REALTOR® (or licensee), who is independent from the office of the REALTOR® (or licensee) representing the seller, to act in the buyer's behalf. A 'buyer's agent' is a REALTOR® (or licensee) seeks to get the best price and works to the advantage of the buyer.

If you have spent anytime on my website, then you know that I only represent buyers. I work to get the best price and seek the best advantage for the buyer. If you have not already read 'Who Represents the Buyer?', I suggest you do so now. It contains additional important information on 'buyer agency'. Also, I recommend that you print a copy of the 'Consumer Notice' and read it as you will be presented with a copy when you meet a licensee. If a real estate licensee does not present you with the 'Consumers Notice' as required by law, you might want to ask yourself if you really want to have a relationship with someone who does not follow the law. Nothing contained herein is intended as legal advice. Seek legal advice from an attorney.