National Realty Logo

National Realty Policy and Procedures

This document is solely for use by
National Realty agents.

National Realty – Reston Office, Headquarters
11890 Sunrise Valley Drive, Reston, VA 20191
Licensed in VA, MD, DC
703-860-4600

Broker Contact Information
Paul Hartke, Owner, Principal Broker, Licensed Instructor
703-675-5550 paulhartke22@gmail.com
Keith Hartke, Owner,  Sales  Manager, Associate Broker
703-932-6501 keithhartke@gmail.com

Table of Contents

 

  1. COMPANY INFORMATION.. 7
  2. Mission Statement 7
  3. Vision Statement 7
  4. Contact Information. 7
  5. Business Continuity. 7
  6. OFFICE POLICIES. 7
  7. Office Hours. 7
  8. Observed Holidays. 7
  9. Firm Affiliation. 7
  10. Technology. 9
  11. Internet Use/Social Media. 9
  12. Office Security. 10
  13. Workplace Security. 10
  14. Office Appearance. 11
  15. Dress Code. 11
  16. Eating in The Work Area. 11
  17. Parking. 11
  18. Document Retention Policy. 11
  19. Absences. 12
  20. Alcohol and Illegal Drug Use. 13
  21. Insurance. 13
  22. Agent Safety. 13
  23. Confidentiality. 14
  24. FORMS. 14
  25. Standard Forms. 14
  26. Signatory Authority. 15
  27. Deadlines. 15
  28. LAWS & REGULATIONS. 15
  29. Virginia Fair Housing Law.. 15
  30. Licensing. 18
  31. Real Estate Settlement Providers Act (RESPA). 21
  32. Compensation and Cooperation Policies. 22
  33. Procuring Cause. 23
  34. Commission and Other Payments. 23
  35. Seller’s Offer of Compensation to Buyer Broker………………………… 23
  36. Buyer Rebates. 24
  37. Compensation Upon Leaving Firm.. 25
  38. AGENCY. 25
  39. Agency Definitions. 25
  40. Types of Agency Relationships. 27
  41. Establishing a Brokerage Relationship. 32
  42. Liability. 34
  43. DISCLOSURES. 35
  44. Agency Disclosures. 35
  45. Licensee Disclosures – Property Condition. 36
  46. Seller Disclosures – Residential Property Disclosure Act 38
  47. Lead Based Paint 42
  48. Audio/Video Surveillance. 43
  49. Contract Disclosures. 43
  50. ESCROW.. 44
  51. Earnest Money Deposits. 45
  52. Pre-Settlement Occupancy Deposits. 47
  53. Post-Settlement Occupancy Deposits. 47
  54. Interest in Escrow Accounts: 47
  55. MARKETING.. 48
  56. Advertising Policies. 48
  57. Fair Housing. 49
  58. REALTOR® Trademark. 49
  59. Business Cards. 50
  60. Do Not Call / CANSPAM Act 50
  61. Electronic/Internet/Social Media Advertising. 51
  62. Required Advertising Disclosures. 51
  63. Signs. 51
  64. Prohibited. 52
  65. Prospecting. 53
  66. MLS 53
  67. Lockboxes. 53
  68. Photographs/Videos. 53
  69. Agent/Owner Advertising. 54
  70. Open Houses. 54
  71. Procuring Clients. 54
  72. Rebates and Incentives. 55
  73. LISTING PROPERTIES FOR SALE. 55
  74. Required Documentation. 55
  75. Items to Convey. 55
  76. Move-Out Condition. 56
  77. Well and Septic. 56
  78. Pets 56
  79. Property Security. 56
  80. Access. 57
  81. Homeowner’s Insurance. 57
  82. Utilities. 57
  83. HOA/Condo. 57
  84. Listing Agreements. 57
  85. Amount of Comission with Sellers 57 BUYER REPRESENTATION.. 58
  86. Buyer Agency Agreements. 58
  87. Showing Property. 58
  88. Agent Safety. 59
  89. Amount of Commission with Buyers 60
  90. CONTRACTS. 60
  91. Contracts. 60
  92. Purchase Offers. 60
  93. Presenting the Offer. 61
  94. Multiple Offers. 62
  95. Counter Offers. 62
  96. Ratification. 62
  97. Contract to Settlement 63
  98. Termination and Release. 64
  99. Time is of the Essence. 64
  100. INSPECTIONS. 64
  101. Home Inspection. 64
  102. Termite Inspection. 65
  103. Pre-Settlement Walk Through Inspection. 65
  104. HOA/CONDO ASSOCIATIONS. 66
  105. Property Owners’ Association Act 66
  106. Condominium Act 67
  107. TROUBLESHOOTING.. 71
  108. Other. 72
  109. Agent Transactions. 72
  110. Website Accessibility. 72

 

 

 

Policy Statement Regarding Compensation

 

Under policy established by your local association of REALTORS®, Virginia REALTORS®, and the NATIONAL ASSOCIATION OF REALTORS®  (NAR) regarding compensation:

 

  1. The Broker’s compensation for services rendered is solely a matter of negotiation between the Broker and their client, and is not fixed, controlled, recommended, or maintained by any persons not a party to the compensation agreement.

 

  1. Compensation paid by a Listing Broker to a Cooperating Broker in respect to any listing is established by the Listing Broker in the offer of compensation, and is not fixed, controlled, or maintained by any person other than the Listing Broker as established in a brokerage agreement with the owner.

 

 

Policy Statement Regarding Discrimination and Fair Housing

 

It is the policy of National Realty LLC, the Virginia REALTORS®, , the Northern Virginia Association of Realtors nd its members to comply with the REALTOR® Code of Ethics, local, state, and federal fair housing laws and provide for fair housing throughout the Commonwealth of Virginia, to all its citizens, regardless of race, color, religion, national origin, sex, elderliness, familial status, disability, sexual orientation, gender identity, military status, source of income, or any other protected class.

 

Antitrust Statement

 

This Company maintains a strong policy against any antitrust involvement by the Company, its agents or employees.  Few obligations can be taken more seriously than this area.  The Company requires each person associated with it to be knowledgeable about antitrust concerns.  By signing this manual, you acknowledge your understanding of antitrust principles.  You should visit and read NAR’s antitrust resources at https://www.nar.realtor/field-guides/field-guide-to-antitrust .

 

Two areas are primary antitrust concerns:

 

Price Fixing:  Price fixing means any agreement, setting, consent to, suggestion or implication with a competitor regarding a fee to charge.  This includes fees charged to the public, fees split among brokers and fees paid to agents.  “Agreement” can be overt, covert, express or implied.  It is very broad based and can even be suggested or implied by casual conversation with any competitor.

 

Accordingly, the Company, its agents and staff are prohibited from discussing with competitors any aspect of the fees the Company charges or how total fees are split.  The Company determines its charges based on the Company’s own independent internal analysis of its expenses, its revenue, its desired profit level and its choice of the type and level of service it desires to provide.

 

In any discussion with a member of the public about our charges (such as at a listing appointment), the only acceptable answer about why the Company charges what it does is the foregoing explanation.  Do not be drawn into a discussion about company fees as “the standard rate,” “the Board rate,” “the typical rate” or the like.  If questions arise about other company’s fees, suggest that the potential client call several competitors and ask about their rates.

 

Boycotting Competition:  It is also a violation of federal law to make any agreement, express or implied, with a competitor to boycott or otherwise not deal with a third party.  Even if it were implicit and not overt, it could be construed as an illegal boycott.

 

The Company prohibits any agent or staff member from making any agreement or suggestion with a competitor, including an individual agent, that they or the Company will not deal with a third broker or agent, vendor, or other third-party service whether it be a listing company, buyer’s brokerage, or any other broker or agent.  This includes comments made in social settings and/or on social media.

 

 

1.     COMPANY INFORMATION

A.    

 

 

Mission Statement

National Realty seeks to provide our agents with the training and support needed to provide quality client representation and to help our clients obtain successful results in their real estate needs.

B.     Vision Statement

To help our clients in real estate transactions and help our agent become successful.

C.    

 

 

Contact Information

The Broker generally will be available during normal business hours to discuss real estate matters.  In the case of an emergency after business hours, the Broker may be contacted at: Paul Hartke 703-675-5550 or Keith Hartke 703-932-6501.                                                                                                 
OFFICE POLICIES

A.     Office Hours

Monday-Friday:  9am-4pm
Saturday-Sunday: Email or phone/text to Paul or Keith Hartke
Holidays:  Open most holidays if a weekday with limited hours

Note: The above hours are standard business hours for opening and closing the office.  Agents who are independent contractors set their own hours and appointment times.

B.     Observed Holidays

 

 

The office will not be open during standard business hours on the following holidays: Christmas, Easter, Thanksgiving. Holidays that fall on a Saturday will be observed on Friday, the day before; holidays that fall on a Sunday will be observed on Monday, the day after.

C.   Firm Affiliation

i.     Joining the Brokerage

All new Agents must sign an Independent Contractor Agreement.  Copies of the signed agreement will be provided to both the Agent and the Broker.  All Company rules stated herein must be followed and your acknowledgment of such rules is evidenced by your signature of receipt of this manual.  It is important that you keep a copy of this document as it is legally binding and provides information on your rights and responsibilities.

 

ii.   During Affiliation

Broker and Agents, at their separate expense, shall keep their licenses issued by the Virginia Real Estate Board in active status, and at their separate expense shall pay all fees, including license fees and taxes owed to any federal, state, or local governmental jurisdiction and those arising out of their respective activities as real estate broker and as real estate salespersons, and neither shall be liable for such fees or taxes owed by the other.  In the event that the license issued to Broker or Agent by the Virginia Real Estate Board is revoked, suspended, or not renewed for any reason, the Independent Contractor Agreement shall be suspended. If the license is not reinstated within 30 days, the Independent Contractor Agreement will automatically terminate unless otherwise noted in the Agreement. 

 

All dues or other expenses of Agent arising out of the membership of Agent in any organization, including organizations of brokers, salespersons, or both, shall be paid by Agent, and Broker shall not reimburse Agent for such payment.

 

All Agents are responsible for completing the required continuing education as per the Real Estate Board, keeping documentation proving the proper credits were earned, and completing the license renewal process on time.

 

Agent may not incur any fees or expenses for services, supplies or materials on behalf of the Broker and/or Company without prior approval from the Broker if they would bind the Broker and/or Company.

 

iii.  Leaving the Brokerage

 

The company does not charge agent any fee for leaving the company.  Agent should return company notebook if provided to agent. Agent should confirm that they have provided all contract and related documents to broker for all transactions, whether current, active, under contract, or expired.

 

Brokerage agreements are between the broker and the client.  If an agent provides notice of leaving the company to another company, and there is no ratified contract or rental agreement, the company will allow the listing or buyer agreement to be transferred to the new company.  If there is a ratified contract or rental agreement, the agent and company will have earned the commission at that time, so the company would maintain the agreement.  The agent would continue to work on that agreement to closing and the company would pay the agent based on their normal split as agreed in the commission agreement.

 

 

D.  Technology

 

 

i.     General

Company-provided equipment in the office is generally free of charge for use.  There is generally no cost for printing or copying with the office printer.  However, there is a reasonable usage requirement, so broker may charge a fee or ask agent to use a commercial printing company for an excessive number of prints/paper.  Agent should inquire if a large number of copies, especially color, are needed.

The conference rooms and widescreen monitors are free for company-related business use on a reasonable basis and by advance reservation.  The computers in the back of the office are free and print to the company printer.

ii.   Cell Phone Use

Distracted driving is a serious risk to the public and our Agents.  Agents are expected to refrain from using their cell phones while driving.  This includes making or receiving calls, texting, or checking email, and applies whether traffic is slow or stopped.  If a call must be taken while driving, Agents are advised to keep the call short and use hands-free options or pull over for the duration of the call.  It is unlawful for individuals to hold a handheld personal communications device while driving a motor vehicle in Virginia, plus Maryland and DC.

E.   Internet Use/Social Media

Social media includes all means of communicating or posting information or content of any sort on the Internet, including to your own or someone else’s blog, journal or diary, personal website, social networking or affinity website, web bulletin board or a chat room, whether or not associated or affiliated with the Company, as well as any other form of electronic communication.  Any postings must be in compliance with the policies in this manual, including the Company’s advertising, harassment, and discrimination policies.  Inappropriate postings that may include discriminatory remarks, harassment, and threats of violence or similar inappropriate or unlawful conduct will not be tolerated and may subject you to disciplinary action up to and including termination.

 

Agents are not allowed to post anything on social media referencing or including the Company without the consent of the Broker.  Never represent yourself as a spokesperson for the Company.  If the Company is the subject of the content you are creating, be clear and open about the fact that you are an Agent and make it clear that your views do not represent those of the Company, fellow Agents, members, customers, or suppliers.  It is best to include a disclaimer such as “The postings on this site are my own and do not necessarily reflect the views of the Company.”

 

Agents shall refrain from using the internet or social media on equipment we provide, unless it is work-related as authorized by your Supervisor. 

 

Any posting made by a licensee or on behalf of the Company that could be perceived as trying to induce business must be in compliance with all laws and regulations.

F.   Office Security and Front Door After Hours

Office security is critical.  Agents who enter the Hartke Building outside of business hours using the provided front door code must be certain that the door remains locked while in the office and when leaving the office.  If multiple people are in the office, the last person leaving should be certain the door is locked.

G.    Workplace Security

i.         Harassment

Professional behavior is a requirement around your fellow Agents, Brokers, managers, Company employees, staff, clients, and customers.  Harassment, including verbal, physical, visual, religious, and sexual, is strictly prohibited in this office.  A list of things that can be considered harassment include, but are not limited to:

  1. Any racial, ethnic, sexual, or religious jokes/slurs or insults.
  2. Any physical conduct such as unwelcome touching, groping, grabbing, or pinching.
  3. Any visual renderings of sexually suggestive materials or materials negatively reflecting an individual’s ethnicity, race, ancestry, or sexual preference; and
  4. Any unwelcome sexual advances, physically, verbally, and visually of a sexual nature that has a purpose or effect of work performance interference, intimidation, or hostile/offensive working atmosphere.

 

In the event an employee, Agent, or any other staff person feels that they have been harassed, the incident must be reported immediately to the office manager or Broker.  The anonymity of the accuser, as well as the accused, shall be held confidential by the manager and/or Broker to the extent possible.  There will be an investigation, and a written report will be filed.  If the allegation involves the manager or Broker as the accused of such action, an outside investigator may be retained.  Retaliation against complainants is strictly prohibited.  Any employee, Agent, or staff engaging in harassment may be subject to disciplinary action up to and including reprimand, counseling, suspension, and termination.

 

ii.   Weapons Policy

 

Weapons are prohibited in the building and on the premises, parking lot and Hartke Building land. Weapons are also prohibited when showing homes, handling open houses or working with clients.

H.  Office Appearance

It is your responsibility to keep your work area in a clean, tidy, professional manner.  Any conference, meeting, or common areas used must be reorganized and tidied after usage including turning off lights and appliances that were initially off.

I.    Dress Code

Professional manner of dress is a requirement when serving the public in real estate transactions and when representing the Broker.  It is suggested but not required to have the company name, logo or other printed information on or attached to your clothing when meeting clients, whether in the office or elsewhere.

 

 

 

 

J.    Eating in The Work Area

 

 

Food and meals should be eaten in the office kitchen. Vending machine is available. Use of cups and other kitchen ware is available for use.

K.  Parking

The building has many parking spaces.  Do not park in handicap-marked spaces unless you have a valid, state-issued disabled placard or license plate.

L.   Document Retention Policy     

NOTE:   The following requirements are from the Real Estate Board Regulations

 

  • All brokerage agreements and agency disclosures will be retained for a period of 3 years from the date of execution, as per the regulations.
  • All disclosures to unrepresented parties will be retained for a period of 3 years from the date provided to the party, as per the regulations.
  • A complete and legible copy of all executed contracts of sale, executed releases, executed lease agreements, executed property management agreements, and each settlement statement related to a real estate transaction will be retained for a period of 3 years from the date of closing or from ratification (if the transaction fails to close), as per the regulations.
  • A complete and accurate record of receipts and disbursements for moneys received on behalf of others will be retained for a period of 3 years from the date or closing or termination of the sales transaction or termination of lease or conclusion of a licensee’s involvement in a lease, as per the regulations. The records must show: from whom the money was received; the date of receipt; the place of deposit; the date of deposit; and, the final disposition of the funds.

 

  • A completed copy of the lead-based paint disclosure form, where applicable, must be kept for no less than 3 years from the completion date of the sale or commencement of the lease.

 

18 VAC 135-20-185. Maintenance and Management of Financial Records.

40 CFR 745.113 – Certification and acknowledgment of disclosure.

 

                         i.        Brokerage Firm Document Retention Policy

 

Documents stated above may be retained in electronic form or hard copy.  Any client documents must remain confidential. If disposing after 3 years, physical documents should be shredded, and electronic copies should be secure from viewing by third parties.

M.   Absences

i.         Independent Contractors

Broker does not control Agent’s time off.  However, if an Agent plans to be absent from the office (i.e., out of town) for any period of time, they must inform the Broker prior to the scheduled absence.  Additionally, another Agent must be scheduled to cover for the Agent during this absence.  Failure to arrange coverage by another Agent will require Broker to make necessary assignments and determine the appropriate commission split, if applicable.

 

In instances of unexpected absences (i.e., illness), the Agent must inform the Broker as soon as possible.  When possible, another Agent should be scheduled to cover for the Agent during this absence.  If the Agent cannot or does not arrange coverage by another Agent, Broker will make necessary assignments and determine the appropriate commission split, if applicable.

 

N.  Alcohol and Illegal Drug Use

i.         Substance Use

Alcohol and drug use and abuse are strictly prohibited while engaged in real estate brokerage transactions.

 

ii.   Client or Customer Substance Use

An Agent should discourage the use of drugs or alcohol by any party during a transaction.  Upon discovering that a party is under the influence of either drugs or alcohol, the Agent should take appropriate action to terminate that day’s activity and suggest that they discuss or contemplate the transaction another time.

 

iii.  Smoking

Smoking includes both tobacco products and electronic cigarettes and/or vaping. Only designated smoking areas are to be used for smoking.  All other areas are considered nonsmoking areas.  In the presence of parties to transactions, while taking property tours, and while meeting in the Broker’s facility, smoking is not permitted.

O.  Insurance

i.         Automobile insurance

Each Agent should carry adequate automobile insurance to protect not only the Agent but also the customer or client.  In today’s legal climate, liability coverage at the minimum amounts by state law should be obtained.  Any lesser amounts could cause unnecessary exposure of personal assets.  Consult carefully with your insurance agent.  The Agent must name National Realty as an additional insured and provide the Company with proof reflecting that status. There is normally no cost in adding the company to an auto policy.

 

                  ii.            E&O Insurance

Licensed agents will be covered under the Broker’s E&O insurance policy.  Annual payment is required under the existing requirements at the time. Such insurance is non-refundable.  The policy covers agents for business related matters with normal specific exclusions such as intentional violations.

P.  Agent Safety

Agents routinely find themselves in situations in which they are alone with clients or customers about whom they have very little information.  The very nature of showing real estate to prospective Buyers, who are virtual strangers, can make Agents susceptible to becoming victims of violent crimes.  The Company regards your personal safety as a top priority.  If possible, work together to ensure personal safety.  Use the buddy system.  This Company also recommends that all Agents follow three basic safety practices:

 

  • Identify the person you are working with before you join the person alone, in a car or a property. Preferably meet them at the office, copy their driver’s license and make sure someone from the office knows where you will be going with the person.

 

  • Always carry your cell phone with you and make sure it is fully charged and has reception. Program 911 into speed dial and do not hesitate to call for help.

 

  • Trust your instincts. If you have a bad feeling, do not second-guess what it is telling you.  Listen to your gut feeling and protect yourself.

 

The Company will maintain a current list of all Agents’ vehicle information. You must notify the Broker within 3 business days of obtaining a new vehicle or license plate for a vehicle you will be using for company business.

Q.  Confidentiality

All records of this office, as well as conversations between Agents, Broker and Agents, and Agents and parties to the transaction, are considered confidential.  No files shall be removed from this Company without the permission of the Broker and no other information obtained while working for this Company shall be used to the detriment of the Broker.  This means when leaving the Brokerage, Agents must leave all files regarding transactions unless otherwise agreed to in writing by the Broker.

 

All Agents shall also be obligated to honor the confidential information of any client or non-client party to any transaction, as designated in writing on an Agency Disclosure form or other document or as required by law or regulations.  All documents stating a party’s confidential information shall be kept in a special locked file to guard against any unauthorized sharing of this information.  Access to this information shall be limited to the Agent working with the party and the Broker supervising that transaction.

2.     FORMS

A.     Standard Forms

All Agents must use standard forms approved by the Broker.  The company has packages of forms with certain fields filled in by the company.  This includes fields that are most common such as client is not an agent and certain fees.  Agent should review and confirm any pre-filled forms to be certain they are correct and applicable to each transaction.  National Realty uses NVAR forms and our pre-filled NVAR forms for Virginia.  Forms for Maryland and DC use separate standard forms by GCAAR or the Realtor associations of such jurisdictions. Any changes or modifications to the standard forms are not authorized without prior approval by the Broker.  Agents are expected to use the most up to date version of all forms.

B.     Signatory Authority

The company does not allow Agents to sign legal forms on behalf of the Broker.  If you have any questions, please see your Broker.

C.     Deadlines

All legal forms associated with a real estate transaction (e.g. brokerage relationships, disclosures, contracts, etc.) must be turned into the Broker within three days of signatures or ratification.

3.     LAWS & REGULATIONS

Agents affiliated with this Company are expected to follow all federal, local, and Virginia laws and regulations and the REALTOR® Code of Ethics.  Any willful violation of these laws and/or ethics will be grounds for termination.  If an Agent believes that a member of the Company or a Client is violating the law, they must inform the Broker immediately.

A.     Virginia Fair Housing Law

Federal law, Virginia Fair Housing Law and the REALTOR® Code of Ethics provide for 12 protected classes:

  • Race
  • Color
  • Religion
  • National Origin
  • Gender
  • Familial Status
  • Disability
  • Elderliness
  • Sexual Orientation
  • Gender Identity
  • Military Status
  • Source of funds

 

 

                       i.          Prohibited Acts

It is unlawful discrimination for any person to refuse to sell after the making of a bona fide offer, or to refuse to negotiate for the sale of, or otherwise make unavailable or deny, a dwelling to any person because of their membership in a protected class.  It is also discrimination to fail to communicate or process an offer accurately because of one’s protected class status.

It is unlawful to discriminate against any person in the terms, conditions, or privileges of sale of a dwelling, or in the provision of services or facilities in the connection with sale of the dwelling to any member of a protected class.

It is unlawful to represent to any person because of their membership in a protected class that any dwelling is not available for inspection or sale when such dwelling is in fact so available.

 

It is unlawful to induce or attempt to induce selling any dwelling by representations regarding the entry or prospective entry into the neighborhood of a member of a protected class.

 

It is unlawful to refuse to sell, or refuse to negotiate for the sale of, or otherwise discriminate or make unavailable or deny a dwelling because of a disability of a Buyer, a person intending to reside in the dwelling after the sale, or any person associated with the Buyer.

 

It is unlawful to discriminate against any person in the terms, conditions, or privileges of sale of a dwelling, or in the provision of services or facilities in connection with the sale because of a disability of (i) that person, (ii) a person residing in or intending to reside in that dwelling after it was sold; or (iii) any person associated with that Buyer.

 

It is unlawful to include and or attempt to exercise, in any transfer or sale of housing, any restrictive covenant that discriminates based on one’s status in a protected class.

 

It is unlawful to impose different sale prices for the sale of a dwelling upon any person because of their status in a protected class.

 

It is unlawful to use different sale standards or procedures, and/or different provisions in contracts of sale because of one’s membership in a protected class.

 

18 VAC 135-50-80. Unlawful Refusal to Sell or Rent or to Negotiate for the Sale or Rental.

18 VAC 135-50-90. Discrimination in Terms, Conditions and privileges and in Services and Facilities.

 

                     ii.          Reasonable Modifications

It is discrimination to refuse to permit, at the expense of the person with a disability, reasonable modifications of existing premises occupied or to be occupied by any person if the modifications may be necessary to afford such person full enjoyment of the premises. 

 

 

                   iii.          Reasonable Accommodations

It is discrimination to refuse to make reasonable accommodations in rules, practices, policies, or services when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a dwelling.  

 

 

All requests for reasonable accommodation shall be determined on a case-by-case basis.  When a request for a reasonable accommodation establishes that such an accommodation is necessary to afford a person with a disability, and who has a disability-related need, an equal opportunity to use and enjoy a dwelling and does not impose either an undue financial and administrative burden or a fundamental alteration to the nature of the operations of the person receiving the request, the request is deemed reasonable and shall be granted.

 

If the requested accommodation may impose either (i) an undue financial and administrative burden or (ii) a fundamental alteration to the nature of the operations of the person receiving the request, the receiver must offer to engage in a good-faith interactive process to determine if there is an alternative accommodation that would effectively address the disability-related needs of the requester.  Unless the reasonableness and necessity for the accommodation has been established by the requester, a request may be made for additional supporting documentation to evaluate the reasonableness of either the requested accommodation or any identified alternative accommodations.

 

If an alternative accommodation is identified that effectively meets the requester’s disability-related needs and is reasonable, the person receiving the reasonable accommodation request shall make the effective alternative accommodation.  However, the requester shall not be required to accept an alternative accommodation if the requested accommodation is also reasonable.

 

Factors to be considered in determining whether the requested accommodation imposes an undue financial and administrative burden include (a) the cost of the requested accommodation, including any substantial increase in the cost of the owner’s insurance policy; (b) the financial resources of the person receiving the request, (c) the benefits that the accommodation would provide to the person with the disability; and (d) the availability of alternative accommodations that would effectively meet the requester’s disability-related needs.

 

After engaging in a good faith interactive process, a request for a reasonable accommodation may be denied if (i) the person on whose behalf the request for an accommodation was submitted is not disabled; (ii) there is no disability-related need for the accommodation; (iii) the accommodation imposes an undue financial and administrative burden on the person receiving the request; or (iv) the accommodation would fundamentally alter the nature of the operations of the person receiving the request.

 

B.     Licensing

Anyone with an active Real Estate Salesperson license from the Virginia Real Estate Board (VREB), even if they currently work in an administrative capacity only, is still considered licensed for the purposes of the Laws and Regulations and is held to the same standard as Agents/Licensees.

All Real Estate licensees, even if they are only dealing with their own property, are still considered licensed for the purposes of the Laws and Regulations and are held to the same standards as Agents/Licensees working through the Firm.

It is a conflict of interest and a violation of the VREB regulations to be active with a real estate Broker other than the licensee’s principal Broker, without the written consent of the principal Broker and/or to perform licensed activities for a client outside of the Firm.

18 VAC 135-20-270. Conflict of Interest.

i.         Licensed Activities

Only a real estate licensee may perform the following activities:  

 

  • Show Property;
  • Hold an Open House;
  • Answer questions on listings, financing, contracts, brokerage agreements, and legal documents;
  • Discuss, explain, interpret, or negotiate a contract, listing, lease agreement, or property management agreement with anyone outside the Firm;
  • Negotiate or agree to any commission, commission split, management fee, or referral fee.

 

18 VAC 135-20-165. Duties of a Supervising Broker.

 

It is a violation of the regulations for a licensee to negotiate leases for a third party outside of this Firm and/or without a principal Broker.

 

18 VAC 135-20-260. Prohibited Acts.

 

ii.      Unlicensed Assistants and Employees

Anyone with an inactive license (not currently affiliated with the Broker) or who has never been licensed as a Real Estate Salesperson is considered unlicensed for the purposes of the laws and regulations.

 

All unlicensed personal assistants are the responsibility of the Broker and Licensee, and both may be held liable for their actions.  Therefore, Brokers have supervisory oversight over all unlicensed personal assistants hired by Licensees working for the Company.

 

Unlicensed individuals engaging in licensed activity can be sued for damages under the Virginia Consumer Protection Act for actual damages, or $500, whichever is greater.

 

Unlicensed assistants must comply with all MLS and Lockbox rules and regulations.  Remember, the VREB regulations prohibit a licensee from allowing unsupervised access to a home without the Owner’s authorization.  Unlicensed assistants and/or employees are permitted to perform the following activities:

 

  • General clerical duties, including answering phones, responding by electronic media, and providing information shown on the listing;
  • Submit listings and changes to the MLS (if allowed by the MLS);
  • Follow up on loan commitments after contracts have been ratified;
  • Have keys made;
  • Compute commission checks;
  • Place signs on properties;
  • Act as a courier service;
  • Schedule appointments;
  • Record and deposit earnest money deposits;
  • Prepare contract forms for approval of the licensee and supervising Broker;
  • Prepare promotional materials and advertisements for approval of the licensee and supervising Broker;
  • Assemble closing documents;
  • Obtain required public information from governmental entities;
  • Monitor license and personnel files;
  • Order routine repairs as directed by licensee; and
  • Perform any other activities undertaken in the regular course of business for which a license is not required.

 

Compensation of unlicensed assistants must be based upon actual work performed and may not be contingent upon receipt by the licensee of a commission.  The recommended practice is to pay assistants directly for work performed on a regular, recurring basis in the manner of either a regular salary or an hourly wage.  Seeking advice and guidance from an experienced accountant in managing your employee records is highly recommended.

 

18 VAC 135-20-165. Duties of a Supervising Broker.

 

iii.    Business Entities

Any individual or real estate team operating as a business entity must have a business entity salesperson license.

 

 

iv.    Concurrent Licenses

Licensees with a Broker’s license may hold concurrent licenses in more than one firm after submitting a concurrent license form and supporting documentation to the Real Estate Board.  Written statements are required from the principal Brokers at each firm with which the Licensee will be associated.  Separate payment is required for each license.

 

18 VAC 135-20-50. Concurrent Licenses.

C.     Real Estate Settlement Providers Act (RESPA)

The term “Settlement services” includes any service provided in connection with a real estate settlement including, but not limited to: title searches, title insurance, services rendered by an attorney, the preparation of documents, property surveys, the rendering of credit reports or appraisals, pest and fungus inspections, services rendered by a real estate agent or broker, loan origination (e.g. federally related mortgage loans), and the handling of the processing, and closing or settlement.

 

i.         Business Referrals

No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.

 

ii.      Splitting Charges

No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed.

 

iii.    Affiliated Business Arrangements

An affiliated business arrangement means an arrangement in which a person who is in a position to refer business incident to or a part of a real estate settlement service involving a federally related mortgage loan, or an associate of such person, has either an affiliate relationship with or a direct or beneficial ownership interest of more than 1 percent in a provider of settlement services; and that person directly or indirectly refers such business to that provider or affirmatively influences the selection of that provider.

Affiliated business arrangements are exempt from RESPA restrictions so long as a disclosure is made to the person being referred of the existence of such an arrangement and the person is provided with a written estimate of the charge or range of charges generally made by the provider to which the person is referred.  The person being referred must not be required to use that provider of settlement services and the only thing of value that can be received from the arrangement, other than permitted payments under the law, is a return on the ownership interest or franchise relationship.

iv.    Referrals Between Agents

Payments pursuant to cooperative brokerage and referral arrangements or agreements between real estate agents and brokers are not subject to RESPA prohibitions.

 

12 U.S.C. 2602 – Definitions

12 U.S.C. 2607 – Prohibition against kickbacks and unearned fees

 

v.       Virginia Settlement Law

No person selling real property, or performing services as a real estate agent, attorney, lay settlement agent or lender incident to any real estate settlement or sale, shall pay or receive, directly or indirectly, any kickback, rebate, commission, thing of value, or other payment pursuant to any agreement or understanding, oral or otherwise, that business incident to services required to complete a settlement be referred to any person.

Expenditures for bona fide advertising and marketing promotions otherwise permissible under the provisions of the federal Real Estate Settlement Procedures Act are allowed.  The provision of educational materials or classes, if such materials or classes are provided to a group of persons or entities pursuant to a bona fide marketing or educational effort are exempt from the Act’s prohibitions.

No person shall be in violation of Virginia law solely by reason of ownership in a settlement service provider, where that person receives returns on investments arising from the ownership interest, provided that he or she discloses in writing to the consumer an ownership interest in those settlement services, including their ownership percentage in the settlement service provider pursuant to the requirements of the federal RESPA law.

 

4.     Compensation and Cooperation Policies

All commissions are negotiable, and compensation/cooperation policies should be clearly explained to all clients and customers. Any changes to the Company’s commission/fee structure require Broker approval.

 

Licensees who are hired as independent contractors work solely on a commission basis.  There is no government withholding taken from commission payments except the Fairfax County Business and Professional Occupational License tax, deducted from Agent net commission check at the current rate of .0031 (about 1/3 of 1%).  All commissions paid will be reported on IRS form 1099 at the end of each year to federal and state authorities as required.  Based on current regulations, anyone earning less than $600 in a calendar year will not receive a 1099 form.

A.     Procuring Cause

Procuring cause is fact-specific and depends on all the circumstances in a given transaction.  The procuring cause of a deal is the Agent who sets in motion the unbroken chain of events that leads to procuring a Buyer who is ready, willing, and able to purchase the property on terms acceptable to the Seller.  It is not necessarily the Agent who first shows the house, first brings the house to the Buyer’s attention, writes the offer, or is the Buyer’s agent. While these factors are relevant, the main focus is whose efforts set in motion the unbroken chain of events resulting in the deal.

B.     Commission and Other Payments

Offering to pay or paying a transaction-based fee, fees, or other valuable consideration to any person not licensed in this or any jurisdiction for services that require a real estate license is prohibited.

 

Licensees may not accept a commission, fee, or other valuable consideration for any real estate services from any person or entity except the principal or supervising Broker at the time of the transaction.  

18 VAC 135-20-280. Improper Brokerage Commission.

 

Any referral commissions or fees must be paid to the Broker and will be subject to the commission agreement between the Broker and the Licensee.

 

Under Article 6 of the Code of Ethics, all commissions, gifts, and/or rebates accepted during a transaction must be disclosed to the client.

C.     Seller’s Offer of Compensation to Buyer Brokers

 

All listings published in the MLS (Bright MLS) may not include cooperating commissions offered to the broker for a buyer or tenant.  Penalties are very strict and severe.  Agents may not include even the mention or inference of an offer to pay such a commission.  This prohibition includes such a reference in the agent remarks, public remarks, documents included with the listing, photographs or other communication within the MLS listing. agent may also not seek to have third party companies that receive MLS data from Bright MLS to add owner’s offer of compensation to a buyer or tenant broker.

 

The owner’s offer of compensation may be stated anywhere other than the MLS.  The offer of compensation must be authorized by the client in the listing agreement and/or listing agreement addendum.  If authorized by client to disclose that the offer of compensation is negotiable or a certain amount, then Agent may include such compensation information in emails, contract forms, letters, advertisements, social media, etc.

 

When discussing cooperating agent compensation, Agents are expected to clearly explain to the seller that they may offer any amount of compensation – including an offer of no compensation. Agents must explain to sellers their options and the potential advantages and disadvantages of the various options.

 

The amount of an offer of compensation may be included in the listing agreement addendum.  The amount offered will be deducted from the sales price at settlement. However, buyers likely have a broker agreement that includes a buyer commission.  Without an offer by seller to pay all or some of that compensation, the buyer may have to come up with substantial cash at closing.  Some buyers may not have enough cash, or the amount owed to a buyer broker at closing may affect their ability to obtain a mortgage loan.  Some buyers may simply not want to negotiate with a seller who is offering little or nothing.

 

Therefore, the company recommends the seller to authorize 2%, 2.5% or 3% as a reasonable amount.  Again, this is subject to negotiation and ultimately the amount is a line item in the contract offer that the buyer broker will submit.  The amount is always negotiable.  Agents may not make any offer “contingent” on the amount of any compensation payable by seller to buyer broker.  However, the client can do so.

 

The cooperating commission rules stated above also apply to rentals.  A listing agent may not include owner’s offer of compensation to a tenant broker in the MLS.  Based on the reasoning above, the company recommends rental listing at 75% list side commission and offering 25% of the first month rent to a tenant broker commission.  The 25% or other amount may be disclosed in any communication as listed above and confirmed with a written agreement, email or other verifiable communication.

D.    Buyer Rebates

National Realty allows Agents to rebate a portion of their commission to a Buyer.  The amount of the rebate will be deducted from Agent’s portion of the commission check paid to Agent by Broker.  Rebates can provide the buyer with cash at settlement to be applied to certain allowable closing costs, discount points and prepaids.  The amount of any rebate is subject to lender written approval.  Agent must inform a client about the requirement of lender approval for the amount of any rebate.  The broker rebate authorization will be signed and sent to the agent.  Agent is responsible to provide the form to the lender and title company.  The rebate must be entered on the settlement statement at closing.

E.     Compensation Upon Leaving Firm

Agents may provide notice of leaving the firm to another company or to return their license to DPOR.  If Agent has a ratified contract, the firm will still be able to pay the Agent a commission.  If Agent completes the transaction, the agent will receive their normal split as commission.  If the Broker has to handle the transaction to get it to settlement, then Broker may determine a reasonable commission payable to the Agent.  If the Agent has client without a ratified contract or signed lease, then Broker will allow the Agent to transfer the listing if desired.

5.     AGENCY

Title 54.1 of the Code of Virginia (Professions and Occupations), Chapter 21 (Real Estate Brokers, Sales Persons and Rental Location Agents) prescribes (1) your obligations and responsibilities as a licensee; (2) types of agency and brokerage relationships; (3) pre-conditions to a brokerage relationship; (4) how to establish a brokerage relationship; and (5) required disclosure of brokerage relationships.  The following information provides a starting point for understanding your duties as a licensee. 

 

Forms prepared by and available through Virginia REALTORS® will assist you in meeting the requirements of the law, establishing a clear understanding of the relationship with your client, and complying with Article 9 of the Code of Ethics:

 

REALTORS®, for the protection of all parties, shall assure whenever possible that all agreements related to real estate transactions including, but not limited to, listing and representation agreements, purchase contracts, and leases are in writing in clear and understandable language expressing the specific terms, conditions, obligations and commitments of the parties.  A copy of each agreement shall be furnished to each party to such agreements upon their signing or initialing.  (Amended 1/04) 

A.     Agency Definitions

  1. “Agency” means every relationship in which a real estate licensee acts for or represents a person as an agent by such person’s express authority in a residential real estate transaction, unless a different legal relationship is intended and is agreed to as part of the brokerage agreement. Nothing prohibits a licensee and a client from agreeing in writing to a brokerage relationship under which the licensee acts as an independent contractor or which imposes additional obligations on a licensee, however, the licensee shall be responsible for the additional obligations agreed to with the client in the Brokerage Agreement.

 

  1. “Agent” means a real estate licensee who is acting as (i) a standard agent in a residential real estate transaction, (ii) a limited-service agent in a residential real estate transaction, or (iii) an agent in a commercial real estate transaction.

 

  • “Brokerage Agreement” means the written agreement creating a brokerage relationship between a client and a licensee.

 

  1. “Client” means a person who has entered into a brokerage relationship with a licensee.

 

  1. “Customer” means a person who has not entered into a brokerage relationship with a licensee. Without having established a brokerage relationship with a person, the person is presumed to be a customer.  Accordingly, by law a licensee may only perform “ministerial acts” for that person.

 

  1. “Designated Agent” means a licensee who has been assigned by a principal or supervising Broker to represent a client when a different client is also represented by the Broker in the same transaction.

 

  • “Dual Agent” means a licensee who has a brokerage relationship with both Buyer and Seller in the same real estate transaction.

 

  • “Independent Contractor” means a real estate licensee who (i) enters into a brokerage relationship based upon a brokerage agreement that specifically states that the real estate licensee is acting as an independent contractor and not as an agent; (ii) shall have the obligations agreed to by the parties in the brokerage agreement; and (iii) shall comply with the legal duties and required disclosures set forth in the Virginia Code.

 

  1. “Limited-Service Agent” means a licensee who acts for or represents a client in a residential real estate transaction pursuant to a brokerage agreement that provides that the limited service agent will not provide one or more of the standard agent duties set forth in the Virginia Code. A limited-service agent must provide the client, at the time of entering the brokerage agreement, copies of all disclosures required by federal or state law, or local disclosures expressly authorized by state law.

 

  1. “Ministerial Acts” means those routine acts that a licensee can perform for a person that does not involve discretion or the exercise of the licensee’s own judgment. (e.g. filling in the blanks of a contract at the exact direction of a customer.)

 

B.  Types of Agency Relationships

Licensees may have different responsibilities depending on whom they represent in a transaction.  Virginia law provides clear responsibilities for Licensees engaged:

  • By Owners to sell property,
  • By Buyers or Tenants, and
  • By Landlords to manage real estate.

 

                        i.         Standard Agent – Sellers

A Licensee engaged as a standard agent by a Seller shall perform in accordance with the terms set forth in the brokerage agreement.

The Licensee shall promote the interests of the Seller by:

  • Conducting marketing activities pursuant to the brokerage agreement;
  • Seeking a sale at the price and terms agreed upon in the brokerage agreement or at a price and terms acceptable to the Seller;
  • Assisting the Seller in the drafting and negotiating of offers and counteroffers, amendments, and addenda to the real estate contract and in establishing strategies for accomplishing the seller’s objectives;
  • Receiving and presenting in a timely manner written offers and counteroffers to and from the Seller and Purchasers, even when the property is already under contract; and
  • Providing reasonable assistance to the Seller to satisfy the Seller’s contract obligations and to facilitate settlement of the purchase contract.

 

The Licensee shall maintain confidentiality of all personal and financial information received from the client during the brokerage relationship and any other information that the client requests during the brokerage relationship be maintained confidential, unless otherwise provided by law or the Seller consents in writing to the release of such information.

 

The Licensee shall exercise ordinary care.

 

The Licensee shall account in a timely manner for all money and property received by the Licensee in which the Seller has or may have an interest.

 

The Licensee shall disclose to the Seller material facts related to the property or concerning the transaction of which the Licensee has actual knowledge.

 

The Licensee shall comply with all requirements of the Code of Virginia, fair housing statutes, and VREB regulations for residential real estate transactions.

 

The Licensee shall treat all prospective Buyers honestly and shall not knowingly give them false information.

 

Licensees engaged by a Seller shall disclose, in writing, to prospective Buyers all material adverse facts pertaining to the physical condition of the property which are actually known by the Licensee.  

 

If a Licensee has actual knowledge of the existence of defective drywall (as defined in the statute) in a residential property, the Licensee shall disclose the same to the prospective Buyer.

 

Licensees engaged by a Seller may, unless prohibited by law or the brokerage agreement, provide assistance to a Buyer, or potential Buyer, by performing ministerial acts.  Performing such acts does not violate the Licensee’s brokerage relationship with the Seller unless expressly prohibited by the terms of the brokerage agreement, nor shall performing such ministerial acts be construed to form a brokerage relationship with such Buyer or potential Buyer.

 

 

                      ii.        Standard Agent – Buyer

Licensees engaged by a Buyer shall perform in accordance with the terms of the brokerage agreement.  Licensees shall promote the interests of the Buyer by:

  • Seeking a property of a type acceptable to the Buyer and at a price and on terms acceptable to the Buyer;
  • Assisting in the drafting and negotiating of offers and counteroffers, amendments, and addenda to the real estate contract and in establishing strategies for accomplishing the Buyer’s objectives;
  • Receiving and presenting in a timely manner all written offers and counteroffers to and from the Buyer and Seller, even when the Buyer is already a party to a contract to purchase property; and
  • Providing reasonable assistance to the Buyer to satisfy the Buyer’s contract obligations and to facilitate settlement of the purchase contract.

 

Licensees engaged by a Buyer shall maintain confidentiality of all personal and financial information received from the client during the brokerage relationship and any other information that the client requests during the brokerage relationship be maintained confidential unless otherwise provided by law or the Buyer consents in writing to the release of such information.

 

Licensees engaged by a Buyer must exercise ordinary care.

 

Licensees must account in a timely manner for all money and property received by the Licensee in which the Buyer has or may have an interest.

 

Licensees must disclose to the Buyer material facts related to the property or concerning the transaction of which the Licensee has actual knowledge.

 

Licensees must comply with all requirements of the Code of Virginia, fair housing statutes and VREB regulations. 

 

Licensees shall treat all prospective Sellers honestly and shall not knowingly give them false information.

 

If a Licensee has actual knowledge of the existence of defective drywall in a residential property, the Licensee shall disclose it to the prospective Buyer.

 

A Licensee engaged by a Buyer must disclose to a Seller whether the Buyer intends to occupy the property as a principal residence.

 

Licensees engaged by Buyers in a real estate transaction may provide assistance to the Seller or prospective Seller by performing ministerial acts.  Performing such ministerial acts shall not be construed to violate the Licensee’s brokerage relationship with the Buyer unless expressly prohibited by the terms of the brokerage agreement, nor shall performing such ministerial acts be construed to form a brokerage relationship with the Seller.

 

Licensees engaged by Buyers do not breach any duties or obligations to the Buyers by showing properties in which one Buyer is interested to other prospective Buyers, whether as clients or customers, by representing other Buyers looking for the same or other properties, or by representing Sellers relative to other properties.

 

 

                        iii.    Limited-Service Agent

 

National Realty does not allow Limited-Service Agency agreements with clients for the sale of property unless Broker has authorized the specific duties, obligations and fees involved.  If you have any questions, please see your Broker.

 

A Licensee may act as a limited service agent in a residential real estate transaction only with a written brokerage agreement in which the limited service agent (i) discloses that the Licensee is acting as a limited service agent; (ii) provides a list of the specific services that the Licensee will provide to the client; and (iii) provides a list of the specific duties of a standard agent set out in the Code of Virginia that the limited service agent will not provide to the client.

 

 

                        iv.    Independent Contractor

 

National Realty does not allow Independent Contractor relationships with clients for the sale of property unless Broker has authorized the specific duties, obligations and fees involved.  If you have any questions, please see your Broker.

 

An Independent Contractor enters into a brokerage relationship based upon a brokerage agreement that specifically states that the real estate licensee is acting as an Independent Contractor and not an Agent; shall only have the obligations agreed to by the parties in the brokerage agreement; and is still obligated to provide the following standard agent duties: confidentiality, ordinary care, accounting, disclosure of property condition, compliance with all fair housing statutes and regulations, honesty to prospective customers, and agency disclosures.

 

 

Virginia REALTOR®’s Independent Contractor Listing Agreement and most major forms providers include these duties in the Agreement.

 

Brokers: Please note that this is different from your employment/Independent Contractor status with the brokerage. There is a separate Independent Contractor Agreement that defines that relationship.

 

                           v.    Dual Agent

National Realty does not allow dual agency relationships.  The company views dual agency as a potential conflict of interest since price and other factors may no longer be discussed.   Unrepresented customers may not need or request an agent in order to complete a transaction.  If you have any questions, please see your Broker.

 

A dual agent is a Licensee who has a brokerage relationship with both the Buyer and Seller in the same real estate transaction.  A dual agent must make mandatory written disclosures to the clients and get written consent from all parties to the transaction before proceeding.

 

In the case of dual agency with two existing clients of the Brokerage Firm, the dual agent may not disclose to either client any information that has been given by the other client in the confidence of the brokerage relationship unless required or permitted by law.

 

In the case of dual agency with one existing client and one new client in the transaction the Licensee cannot advise either party as to the terms to offer or accept in any offer or counteroffer following commencement of the dual agency relationship.

 

The Licensee cannot advise either party in any dispute that arises relating to the transaction.

 

 

                        vi.    Designated Agent

National Realty does not allow Designated Agency relationships unless the Agent has first contacted the Broker with all the specific facts and circumstances and Broker has authorized designated agency.  If you have any questions, please see your Broker.

 

A designated agent is a Licensee who has been assigned by a principal or supervising Broker to represent a client when a different client is also represented by another Licensee affiliated with the same principal or supervising broker in a transaction.  (The designated Broker remains the “Dual Agent” in the transaction.)  See your forms providers’ form pertaining to designated agency for residential transactions and additional required disclosures contained in the forms. 

 

Designated agents or representatives may not disclose, except to the affiliated Licensee’s Broker, personal or financial information received from the clients during the brokerage relationship and any other information that the client requests during the brokerage relationship be kept confidential, unless otherwise provided for by law or the client consents in writing to the release of such information.

 

 

                      vii.    Power of Attorney

It is possible that a properly drawn Power of Attorney may provide a means to list property and enter into a brokerage agreement.  However, drafting a Power of Attorney document is the practice of law and must be limited to attorneys.  Company management must be notified and should consult with legal counsel to determine whether the Power of Attorney is acceptable.

C.     Establishing a Brokerage Relationship

i.     Preconditions

Prior to entering into any brokerage relationship, a Licensee shall advise the prospective client of:

  • The type of brokerage relationship proposed. Examples include:
    • To represent a client in the sale of a property
    • To represent a client in the purchase of a property
    • To be a dual agent or designated agent
  • Whether and how the brokerage firm will be compensated and whether the Broker will share such compensation with another Broker who may have a brokerage relationship with the other party in the transaction. For example:
    • How much and how will the brokerage firm be paid by your potential client for acting as a Listing Agent
    • How much and how will the brokerage firm be paid for representing a Buyer who wants to purchase a home.

 

 

                      ii.        Timing

A written brokerage agreement is required prior to having substantive conversation about a specific property.

 

However, the law states that a written brokerage agreement is not required prior to a Licensee’s showing properties to a prospective Buyer (when the Licensee does not represent any party to the transaction).  The VREB clarified what it means to “show” a property.  Showing properties to a prospective Buyer is not merely opening the door and leaving the person(s) unsupervised in the property.  Showing a property includes but is not limited to taking the prospective Buyer to the property, walking the individual(s) through the property, and responding to questions or providing information that is of public record; or is included in the listing agreement or description of the property.  However, once the potential Buyer requests the Licensee’s opinion or use of professional discretion and/or judgment, a written brokerage agreement is required to proceed.

 

National Realty and DPOR regulations require a written brokerage agreement prior to showing property or when working with a client.  While basic information may be provided, “working with a client” would involve any substantive discussions about specific properties.  If you have any questions, please see your Broker.

 

                        iii.    Brokerage Agreements

A brokerage agreement is the written Agreement creating a brokerage relationship between a client and a Licensee.  All brokerage agreements must be in writing and must state whether the Licensee will represent the client as an agent or independent contractor.  It must also include the following:

  • A definite termination date; but if it does not, the brokerage relationship shall terminate 90 days after the date of the brokerage agreement;
  • Statement as to the amount of the brokerage fees and how and when such fees are to be paid;
  • Statement as to the services to be rendered by the Licensee;
  • Such other terms of the brokerage relationship as have been agreed to by the client and the Licensee; and
  • If the client consents to dual or designated representation, the appropriate disclosures.

 

The payment or promise of payment or compensation does not create a brokerage relationship between any broker, seller, or buyer.

 

 

                        iv.    Termination of Brokerage Agreement

A brokerage relationship commences at the time that a client engages the Licensee and continues until the completion of performance in accordance with the brokerage agreement or any date of expiration agreed upon by the parties as part of the brokerage agreement.

 

The Licensee and the client(s) can mutually agree, in writing, to terminate the brokerage agreement.  Any termination or release of brokerage agreement must be approved by the Broker.  If you believe that your client has defaulted under the terms of the brokerage agreement, you must notify your Broker immediately.

 

Unless otherwise agreed to in writing, the Licensee owes no further duties to the client after termination, expiration, or completion of performance of the brokerage agreement, except to (i) account for all moneys and property relating to the brokerage relationship and (ii) keep confidential all personal and financial information received from the client during the course of the brokerage relationship.  The Licensee must also keep confidential and any other information that the client requests be kept confidential, unless otherwise provided by law or the client consents in writing to the release of such information. 

 

D.    Liability

Clients and Licensees shall be deemed to possess actual knowledge and information only.  Knowledge or information among or between clients and Licensees shall not be imputed.

 

A Licensee is not liable for providing false information if the information was (i) provided to the Licensee by the client; (ii) obtained from a governmental entity; (iii) obtained from a nongovernmental person or entity that obtained the information from a governmental entity; or (iv) obtained from a person licensed, certified, or registered to provide professional services in the Commonwealth, upon which the licensee relies, and the licensee did not (a) have actual knowledge that the information was false or (b) act in reckless disregard of the truth.

 

6.     DISCLOSURES

A.     Agency Disclosures

Virginia Laws and Regulations specifically address the requirement for Licensees to disclose their brokerage relationships.

 

i.         Disclosures to Unrepresented Parties

Upon having a substantive discussion about a specific property with an actual or prospective Buyer or Seller who is not the client of the Licensee and who is not represented by another Licensee, the Licensee must disclose any brokerage relationship (whether as a standard agent or limited service agent) the Licensee has with another party or parties to the transaction.  If another Licensee represents the other party, this disclosure is not required.

 

The disclosure must be made, in writing, at the earliest practical time, but no later than the time when specific real estate assistance is first provided.

 

If the disclosure is relative to a fully executed purchase contract, it must be turned into the Broker, whether or not the party receiving the disclosure signed it.

 

 

18 VAC 135-20-220. Disclosure of Brokerage Relationships.

 

ii.   Limited-Service Agent Disclosures

A Licensee acting as a limited-service agent must disclose the type of brokerage relationship, a list of specific services that the Licensee will provide to the client, and the specific duties of a standard agent that will not be provided.  Virginia REALTORS® limited-service agreements include the required disclosure language set forth in the law.

 

 

iii.  Dual Agency Disclosures

A Licensee may not act as a dual agent unless she has first obtained the written consent of all parties to the transaction given after written disclosure of the consequences of such dual agency.  This disclosure must be in writing, given to, and signed by both parties prior to the commencement of such dual agency.  The disclosure must be given to and consent obtained from the Buyer no later than the time an offer to purchase is presented to the Licensee who will present the offer to the Seller or listing agent.  The disclosure must be given to and consent obtained from the Seller no later than the time the offer to purchase is presented to the Seller.

 

 

18 VAC 135-20-220. Disclosure of Brokerage Relationships.

 

iv.  Designated Agency Disclosures

A Licensee may not act as a designated agent unless he has first obtained the written consent of all parties to the transaction.  This disclosure must be in writing, given to, and signed by both parties prior to the commencement of such designated agency.

 

 

The disclosure must be given to and consent obtained from the Buyer no later than the time an offer to purchase is presented to the Licensee who will present the offer to the Seller or listing agent.  The disclosure must be given to and consent obtained from the Seller no later than the time the offer to purchase is presented to the Seller.

 

18 VAC 135-20-220. Disclosure of Brokerage Relationships.

 

                           v.    Disclosure of Interest

If a Licensee knows or should have known that he, any member of his family, his own firm, any member of his firm, or any entity in which he has an ownership interest, is acquiring or attempting to acquire or is selling or leasing real property through purchase, sale, or lease and the Licensee is a party to the transaction, the Licensee must disclose in writing that he is a Licensee and that he, any member of his family, his own firm, any member of his firm, or any entity in which he has an ownership interest has or will have an ownership interest to the other parties to the transaction.  This disclosure must be made upon having substantive discussions about specific real property.

 

18 VAC 135-20-210. Disclosure of Interest

B.     Licensee Disclosures – Property Condition

Licensees must treat all prospective buyers and sellers honestly and shall not knowingly give them false information.

 

 

                         i.        Material Adverse Facts

A Licensee representing a Seller as a standard agent must disclose in a timely manner to a prospective Buyer all material adverse facts pertaining to the physical condition of the property which are actually known by the Licensee.  This disclosure must be made in writing to any prospective Buyer and/or Buyer’s Agent.  These disclosures should not be included or written into the Seller’s residential property disclosure form.  They should be made separately, and every effort should be made to confirm receipt.

 

18 VAC 135-20-300. Misrepresentation/Omission.

 

                         ii.       Material Facts

A Licensee must disclose in a timely manner to the Licensee’s own client all material facts related to the property or concerning the transaction when the failure to disclose would constitute failure to exercise ordinary care as defined in the brokerage agreement.

 

18 VAC 135-20-300. Misrepresentation/Omission.

 

                         iii.   Defective Drywall

If a Licensee has actual knowledge of the existence of defective drywall in a residential property that has not been remediated, the Licensee must disclose that to a prospective Buyer, even if he represents the Seller.

 

 

                      iv.      Stigmatized Properties

A Licensee does not have to disclose the following:

 

  • An act or occurrence which had no effect on the physical structure of the property, its physical environment, or the structures located on the property;
  • Suspected haunting;
  • Homicide;
  • Felony; or
  •  
  • 55.1-713. Actions under this chapter.

 

If a Licensee wants to disclose any of the above listed issues with a listed property, they must get the written consent of the Seller prior to any disclosure.

C.     Seller Disclosures – Residential Property Disclosure Act

The Virginia Residential Property Disclosure Act (RPDA) applies to all transfers by sale of residential real property, whether or not the transaction is with the assistance of a licensed real estate salesperson or broker.  The disclosures made pursuant to this Act are Seller/Owner disclosures, not Licensee disclosures.  Licensees should not make their disclosures on the Seller’s residential property disclosure form.

 

 

                       i.          Licensee Duties under the RPDA

A Licensee representing a Seller as the listing broker has a duty to inform the Seller of their rights and obligations under the RPDA.  If a prospective Buyer for the property is not represented by a Licensee, the listing agent is obligated to inform the unrepresented Buyer(s) of their rights under the RPDA as well.

 

A Licensee representing a Buyer has a duty to inform the Buyer(s) of their rights and obligations under the RPDA.

 

If a Licensee performs his duties to inform, the Licensee has no further duties to the parties under the RPDA and will not be liable to any party to the transaction for a violation of the RPDA or any failure to disclose.

 

The Summary of Rights and Obligations form provided by Virginia REALTORS® assists licensees in complying with these requirements.  The Act does not require that this form be used.

 

 

                      ii.        Timing of Disclosures

Under the law, the Owner of the residential real property must provide the Purchaser with a residential property disclosure statement prior to the ratification of the real estate purchase contract.  This form is available on the VREB website. The disclosures must be accurate as of the date of delivery and there is no obligation for a seller to provide a new disclosure form if additional disclosures are added if settlement on a ratified contract occurs after such update.

 

If the disclosure is delivered after ratification, the Purchaser’s sole remedy is to terminate the contract at or prior to the earliest of (i) three days after delivery to the disclosure statement; (ii) five days after the postmark if the disclosure statement is mailed; (iii) settlement; (iv) occupancy of the property by the Purchaser; (v) application to a lender for a mortgage loan where the application states the right to terminate ends upon application; or (vi) execution of a separate written waiver of termination.  If the Purchaser chooses to terminate, the termination must be without penalty to the Purchaser and any deposit shall be promptly returned to the Purchaser.

 

 

At or before settlement, the Owner is required to disclose any material change in the disclosures made relative to the property.

 

 

                        iii.    Buyer Beware Statements

The residential property disclosure statement must be provided by the Owner to the Buyer to alert the Buyer of certain matters that may affect the Buyer’s decision to purchase the property.  The form states that the Owner makes no representations or warranties as to:

 

  • The condition of the property or any structures, or any recorded covenants or restrictions, or any conveyance of mineral rights;
  • Current lot lines or the ability to expand, improve, or add structures to the property;
  • Any matters pertaining to parcels adjacent to the property including zoning or permitted uses;
  • Whether the property subject to a historic district ordinance;
  • Whether the property contains any resource protection areas under the Chesapeake Bay Preservation Act;
  • The presence of any registered sex offenders in the surrounding area;
  • Whether the property is in a dam break inundation zone;
  • The presence of any wastewater system located on the property, including type, size, or maintenance responsibilities;
  • The right to install or use solar energy collection devices;
  • Whether the property is located in a special flood hazard area;
  • Whether the property is subject to any conservation or other easements;
  • Whether the property is subject to a community development authority;
  • Whether the property is located on or near deposits of marine clays;
  • Whether the property is located in a locality classified as Zone 1 or Zone 2 by the US EPA Map of Radon Zones;
  • Whether the property contains any pip or other fixture that does not meet the federal Safe Drinking Water Act definition of “lead free”;
  • The existence of defective drywall on the property; or
  • The condition or regulatory status of any impounding structure or dam on the property.

 

The disclosure statement advises Buyers that the Seller is making no disclosures with respect to the items listed above and Buyer should exercise whatever due diligence he deems necessary to research the issue.

 

 

                      iv.      Military Air Installation

The Owner of residential property located in any locality in which a military air installation is located shall disclose to the Purchaser whether the property is located in a noise zone or accident potential zone, or both as designated on the official zoning map by the locality in which the property is located.  The specific noise zone and/or accident potential zone must be stated in the disclosure.

 

This disclosure must be made on the form provided by the VREB.

 

No Purchaser of property located in a noise zone designated on the official zoning map of the locality as having a day-night average sound level of less than 65 decibels will have the right to terminate a real estate purchase contract pursuant to the RPDA for failure of the property Owner to timely provide disclosure.

 

 

                         v.       Pending Building or Zoning Violations

If the Owner has actual knowledge of any pending enforcement actions under the Uniform Statewide Building Code that affect the safe, decent, sanitary living conditions of the property, and has received written notification from the locality, or any pending violation of the local zoning ordinance that the Owner has not remedied within a time period set out in the notice, the Owner must provide written disclosure of that fact to a prospective Purchaser.  The disclosure must be provided to the purchaser on a form provided by the VREB.

 

 

                      vi.      Lis pendens

If the Owner has actual knowledge of a lis pendens filed against the property, the Owner must provide a written disclosure to the prospective Purchaser. The disclosure must be provided to the purchaser on a form provided by the VREB.

 

                    vii.      Methamphetamine Laboratory

If the Owner has actual knowledge that his/her property was previously used to manufacture methamphetamine and has not been cleaned up in accordance with the guidelines established in the law, the Owner must provide that information in a written disclosure to a prospective Purchaser.  The disclosure must be made on a form provided by the VREB.

 

 

                  viii.      Stormwater Management Facilities

An Owner of residential real property who has actual knowledge of a privately owned stormwater management facility located on such property shall disclose to the Purchaser the long-term maintenance and inspection requirements for the facility. The disclosure must be made on a form provided by the VREB.

 

 

                       ix.      Repetitive Loss

The owner of residential real property located in the Commonwealth who has actual knowledge that the dwelling unit is a repetitive risk loss structure shall disclose such fact to the purchaser. For purposes of this section, “repetitive risk loss” means that two or more claims of more than $1,000 were paid by the National Flood Insurance Program within any rolling 10-year period, since 1978. Such disclosure shall be provided to the purchaser on a form provided by the Real Estate Board on its website.

 

 

                         x.      Tourism Activity Zone

An Owner of residential property located partially or wholly within a designated tourism activity zone may disclose in writing to any prospective purchaser that the property is located within a tourism activity zone, with a description of potential impacts associated with the location, including impacts caused by special events, parades, temporary street closures, and indoor and outdoor entertainment activities.  This disclosure is not mandatory.

 

D.    Lead Based Paint

Federal law requires that before signing a purchase contract for housing built before 1978, Sellers must provide the following to the Buyer(s):

  • An EPA-approved lead hazard information pamphlet.

 

  • A disclosure of the presence of any known lead-based paint or any known lead-based paint hazards and provide any additional information available concerning those hazards. This includes any paint or hazards that have been remediated.

 

  • A 10-day period (unless all parties agree to a different period of time) to conduct a risk assessment inspection for the presence of lead-based paint hazards. The Buyer does have the right to waive, in writing, the opportunity to inspect.

 

  • A lead warning statement as per federal law.

 

  • A written statement for the Buyer to sign indicating that the Buyer has read the warning statement and understands its contents, has received the lead hazard information pamphlet, and had a 10-day opportunity before becoming obligated under the contract to conduct an inspection.

 

The Seller must also disclose to each agent the presence of any known lead-based paint and/or lead-based paint hazards in the housing being sold and the existence of any records or reports pertaining to lead-based paint.

 

The Licensee is responsible for informing all parties of their obligations under this law and ensuring compliance with the requirements of the law.

 

If any of the above disclosure activities occur after a Buyer has provided an offer to purchase, the Seller shall complete the required disclosure activities prior to accepting the offer and allow the Buyer the opportunity to review the information and possibly amend their offer.

40 CFR Part 745 et. seq. – Lead-Based Paint Poisoning Prevention in Certain Residential Structures.

E.     Audio/Video Surveillance

In the event a Seller has a recording system in the property which records or transmits audio, the Listing Agent should advise the Seller that recording or transmitting of audio may result in a violation of state and/or federal wiretapping laws.  If the Seller has this type of recording system and is not willing to disclose it and/or turn it off, Seller should be advised to speak with legal counsel before proceeding to list the property.

F.      Contract Disclosures

                         i.        Sex Offender Registry

Sellers and/or Listing Agents are not required to disclose any known sex offenders in the immediate neighborhood of the property.  If a Buyer asks, or would like to do a search, Agent may direct them to check any public sex offender list.  A Licensee shall not complete this search for the client/customer.

 

                        ii.      Buyer Residency

A Licensee representing a Buyer must disclose to the Seller whether the Buyer intends to occupy the property as a principal residence.  This disclosure is included in the Virginia REALTORS® offer to purchase.

 

 

iii.  Property Owner’s Association or Condominium Act

A Seller must disclose in the contract if the property is located within a development that is subject to the Virginia Property Owner’s Association Act or the Condominium Act.

 

§ 55.1-2308. Contract for resale; disclosures.

iv.  Disclosure of Interest

If a Licensee knows or should have known that he, any member of his family, his firm, any member of his firm, or any entity in which he has an ownership interest, is purchasing or attempting to purchase or is selling real property and the Licensee is a party to the transaction, the Licensee must disclose in writing that he is a Licensee and that he, any member of his family, his firm, any member of his firm, or any entity in which he has an ownership interest has or will have an ownership interest in the property to the other parties to the transaction. This disclosure must be made to the Buyer or Seller upon having substantive discussions about the specific property.

 

18 VAC 135-20-210. Disclosure of Interest.

7.     ESCROW

As set forth in the Virginia Administrative Code and Real Estate Board Regulations, all down payments, earnest money deposits, money received upon final settlement, application deposits, rental payments, rental security deposits, money advanced by a Buyer or Seller for the payment of expenses in connection with the closing of real estate transactions, money advanced by the broker’s client or expended on behalf of the client, or other escrow funds received by the Broker or his Associates on behalf of his client or any other person shall be deposited in a federally insured escrow account that is labeled as such, unless all principals to the transaction have agreed otherwise in writing.  All escrow accounts, checks and bank statements must be labeled “escrow”, and the account(s) must be designated as “escrow” accounts with the financial institution where the account is established.

 

Unless otherwise agreed to in writing by all principals to the transaction, a Licensee shall not be entitled to any part of the earnest money deposit or to any other money paid to the Licensee in connection with any real estate transaction as part of the Licensee’s commission until the transaction has been consummated

 

18 VAC 135-20-180. Maintenance and Management of Escrow Accounts.

 

Licensees must include in any offer to purchase identification of all those holding any deposits.  It is a violation of the regulations to accept anything of value as a deposit on a contract or offer to purchase without acknowledging its acceptance in the agreement.

 

18 VAC 135-20-300:7. Misrepresentation/Omission.

18 VAC 135-20-180. Maintenance and Management of Escrow Accounts

 

The Regulations require all Brokers who reasonably believe the improper conduct of a Licensee has caused noncompliance with the proper maintenance of an escrow account to report the Licensee and incident to the VREB within 3 business days.  Due to this requirement, all Licensees who do not comply with the laws and regulations regarding deposits of escrow funds will be reported to the VREB and may be subject to termination.

 

18 VAC 135-20-180 Maintenance and Management of Escrow Accounts.

A.     Earnest Money Deposits

Earnest Money checks from buyers are normally delivered to the company for deposit in the company escrow account.    In some cases, with broker approval, the earnest money check may be delivered to the settlement company.  Agent must provide proof of such delivery.  For new homes, the earnest money deposit is normally paid to the new homes company.  Deposits for rentals are paid to the company representing the landlord.  If you have any questions or special requests, please see your Broker. 

 

Earnest money checks may be hand delivered at the National Realty office or sent via overnight delivery companies such as UPS or FedEx.  Payment by wire may also be accepted.  National Realty requests agents to provide the earnest money check within three days of contract ratification to assure compliance with the 5 day requirement below. .  Checks should not be mailed due to the risk of late delivery, incorrect address or other factor that may result in a violation of the receipt requirements noted below.  If hand delivery or an overnight service is not possible for any reason, agent should contact the broker. 

 

Agent must receive an EMD check from a buyer client prior to submitting a sales contract offer.  A copy of the check must be provided with the contract offer. 

If agent does not have the check at the time buyer signs an offer, agent should contact the broker for advice before taking any further action.

 

                         i.        Receipt

Any earnest money deposit held by a Firm or sole proprietorship must be placed in an escrow account by the end of the fifth business banking day following ratification, unless otherwise agreed to in writing by the principals to the transaction.

 

18 VAC 135-20-180. Maintenance and Management of Escrow Accounts.

 

 

All earnest money deposits, along with a copy of the ratified contract, brokerage agreements, disclosures, and addendums must be submitted within 2 days of contract ratification with the property street address stated in the check memo section and with verification to the broker of deposit delivery.

 

If you discover that you have not complied with these rules, you must report the non-compliance to the Broker immediately.  Failure to comply with this policy may be grounds for termination and/or reporting to the Real Estate Board.  Repeated violations of this policy will lead to termination.

                          ii.    Follow Up

Licensees must provide, in a timely manner, written notice of any material changes to the transaction to all principals to the transaction. This includes failing to notify the seller or seller’s agent that the EMD has not been deposited in accordance with the terms of the contract.

 

18 VAC 135-20-310. Improper Delivery of Instruments.

 

Agent must contact the broker immediately if the EMD check is not delivered as required as to steps to take with the buyer as well as notifying the parties and agents as to corrective action.   This includes if the check may be rejected for inadequate funds in an account or for any other reason.

                        iii.    Disbursement

Earnest money deposits held by the firm must remain in the escrow account until the transaction has been consummated or terminated.

 

Unless otherwise agreed in writing by all principals to the transaction, expenses incidental to closing a transaction (e.g., fees for appraisal, insurance, credit report, etc.) cannot be deducted from a deposit.

 

In the event the transaction does not close, the Broker must hold the funds in escrow until one of the following occurs:

 

  • All principals to the transaction have agreed in writing as to their disposition;
  • A court orders disbursement of the escrow funds;
  • The funds are interpleaded to the court;
  • The Broker releases the funds to the principal to the transaction who is entitled to receive them in accordance with the clear and explicit terms of the contract that established the earnest money deposit; or
  • A determination is made pursuant to the 15-day letter process.

 

18 VAC 135-20-180. Maintenance and Management of Escrow Accounts.

 

                        iv.    Foreclosure

If there is in effect at the date of the foreclosure sale, a real estate purchase contract to buy the property foreclosed upon and the real estate purchase contract provides that the earnest money deposit shall be paid to a party to the contract in the event of a termination of the real estate purchase contract, the foreclosure shall be deemed to be a termination of the real estate purchase contract and the Licensee may, absent any default on the part of the Buyer, disburse the earnest money deposit to the Buyer pursuant to that provision of the real estate purchase contract without further consent from, or notice to, the parties.

 

 

18 VAC 135-20-180. Maintenance and Management of Escrow Accounts.

B.     Pre-Settlement Occupancy Deposits

A pre-settlement occupancy occurs when the Buyer receives possession of the property prior to the scheduled closing.  Any escrow collected as part of this agreement is subject to regular escrow regulations, including the requirement to deposit all escrow within five business banking days of ratification.

C.     Post-Settlement Occupancy Deposits

A post-settlement occupancy occurs when the Seller retains possession of the property for an agreed upon timeframe after the settlement is completed.  Any escrow collected is subject to regular escrow regulations, including the requirement to deposit all escrow within five business banking days of ratification.

D.    Interest in Escrow Accounts:

At least every six months, interest accumulated in escrow accounts that belong to the Company shall be moved into operating accounts (unless disposition of escrow interest is otherwise agreed to by parties in contract).

 

Written disclosure in the contract at the time of contract writing must be made to the principals to the transaction regarding the disbursement of interest.

 

18 VAC 135-20-180. Maintenance and Management of Escrow Accounts.

8.     MARKETING

“Advertising” means all forms of representation, promotion and solicitation disseminated in any manner and by any means of communication to consumers for any purpose related to licensed real estate activity

 

18 VAC 135-20-190. Advertising by Licensees.

 

Article 12 of the NAR Code of Ethics states:

REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations.  REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional. (Amended 1/08)

A.     Advertising Policies

Management must approve all advertising – electronic or otherwise – including content and where the advertisement will be posted. This policy covers both print and electronic media advertising (i.e., personal Web sites, blogs, and listings posted on any site.)

 

All Licensees and employees are responsible for knowing and complying with all Fair Housing Laws, Antitrust Laws, State Laws and Regulations, and the REALTOR® Code of Ethics as they apply to advertising.

 

The Firm/Company name must be clearly and legibly displayed in all advertising.

 

Before advertising a specific identifiable property, the licensee must obtain the written consent of the Owner.

 

18 VAC 135-20-290. Improper Dealing.

 

If property is advertised by general description and is not listed by the Licensee doing the advertisement, the actual type of services offered must be identified in the advertisement.

 

18 VAC 135-20-190. Advertising by Licensees.

B.     Fair Housing

It is unlawful to make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination or an intention to make any such preference, limitation or discrimination based on membership in a protected class.

 

The use of words or symbols associated with a particular religion, national origin, gender, or race shall be conclusive evidence of an illegal preference, which cannot be overcome by a general disclaimer.

 

 

                         i.        Fair Housing Logo

The Company requires the fair housing logo to be included in all advertisements and marketing materials. If you have any questions, please see your Broker.

 

Use of the fair housing logo consistently creates a presumption that the Licensee intends to follow fair housing laws.  Licensees that use the logo should be careful to use it in all advertisements as selective use has been viewed as discriminatory.

                      ii.        Prohibited advertising Language.

Be aware that the selective use of words, phrases, symbols, visual aids and media in the advertising of real estate may indicate preferences held by the advertiser and lead to allegations of discriminatory housing practices. Words in a real estate advertisement which indicate a particular race, color, religion, national origin, sex, elderliness, familial status, disability, , sexual orientation, , gender identity, status as military a veteran or source of funds are considered likely violations of the Virginia Fair Housing Act and may not be used in advertisements.  Advertising copy used by every member of our Company must describe the property, NOT THE DESIRED BUYER OR TENANT.

C.     REALTOR® Trademark

The registered symbol (®) must always be used in conjunction with the term REALTOR®.  Please see the NAR Trademark Manual for rules on using the term REALTOR®.  In most word processing programs, the registered symbol can be added by putting the letter “r” between parentheses or pressing “CTRL” “ALT” and “r” simultaneously.  http://www.realtor.org/membership-marks-manual

 

Only active REALTORS® can use the term REALTOR® in advertising.

D.    Business Cards

 

National Realty provide a first set of business cards for Licensees at no cost. Additional cards may be ordered through the company. If you have any questions, please see your Broker.

All Licensee business cards must at least include the Licensee’s name, the Firm name, and contact information (e.g. telephone number or website address).  All Company business cards must meet the following additional requirements:

 

National Realty logo must be included on all business cards.  National Realty has a standard template for cards with options for additional information as approved by the broker. Agent may submit other designs from other companies to be purchased at agent’s expense and subject to broker approval.

 

18 VAC 135-20-190. Advertising by Licensees.

E.     Do Not Call / CANSPAM Act

This Company follows all federal and state Do Not Call (DNC) and CANSPAM laws. Failure to follow these rules can lead to sizeable fines.  If you are not familiar with DNC requirements, please talk to your Broker.  No prospecting calls can be made before 8 a.m. or after 9 p.m. 

 

All email, fax, and mail solicitation must provide a way for recipients to opt-out of future marketing.  If a prospect requests that they no longer wish to receive marketing material and/or phone calls, the Associate should immediately remove their name, telephone number, and/or email address from any relevant marketing list.

 

The CANSPAM Act requires that the following information be included in each email advertisement:

  • Valid physical address;
  • Identification that the email is an advertisement;
  • An opt-out method; and
  • There cannot be deceptive subject lines or false or misleading information.

F.      Electronic/Internet/Social Media Advertising

All electronic media listings advertised must be kept current and consistent with the property description and actual status of the listing.  The Licensee must update in a timely manner material changes to the listing status authorized by the Seller or property description when the Licensee controls the electronic media site.  If the advertisement is on a third-party website, the Licensee must make timely written requests for updates reflecting material changes to the listing status or property descriptions.

 

18 VAC 135-20-190. Advertising by Licensees.

G.     Required Advertising Disclosures

                        i.         Electronic Media

All electronic media advertising by a Licensee must include the Licensee’s name, the Firm’s name, the city and state of the Licensee’s place of business, and state(s) of licensure for the Licensee (i.e. Licensed in Virginia or Virginia Realtor).

 

All electronic media disclosures are required to be viewable on the main page or no more than one click away from the main page.  

 

18 VAC 135-20-190. Advertising by Licensees.

 

                          ii.    Print

All other Licensee advertising must at least include the Licensee’s name and the Firm’s licensed name.

 

18 VAC 135-20-190. Advertising by Licensees.

H.    Signs

All for sale signs placed on the property must include at least the Firm’s licensed name and the Firm’s primary or branch office telephone number.  The Firm name must be clearly and legibly displayed.

 

It is suggested that Licensees include their licensed name on all signs as well.  To be in compliance with DPOR, the name you use must be the name DPOR has on record.  To advertise in any other name, the licensee must have a business entity salesperson license or a doing business as (d/b/a) form on file with DPOR.

 

18 VAC 135-20-190. Advertising by Licensees.

 

Licensees are responsible for familiarizing themselves and complying with all individual POA/HOA or Condominium bylaws and local ordinances.  Failure to follow the proper ordinances can result in fines, sign removal and confiscation of the sign.  A list of local ordinances can be found on www.Municode.com. POA/HOA and Condominium bylaws should be obtained from the Owner.

 

i.         For Sale and Rent Signs, Directional Signs, Coming Soon

The Agent must have written consent (i.e. a signed Listing Agreement) from the Owner to post a sign on the property.

 

18 VAC 135-20-190. Advertising by Licensees.

18 VAC 134-20-290. Improper Dealing

 

National Realty uses a company that provides signs with our template for sales, rentals and other signs for use by agents.  Signs may also be ordered separately subject to design and content approval.   No signs can be placed in the VDOT right of way – this includes median strips. Permission should be obtained prior to putting directional signs on private property.

 

                        iv.    Miss Utility

The installation of a sign in the ground by hand or foot, without the use of tools or equipment, does not require a call to Miss Utility.  Installation of any other type of sign will require a call to Miss Utility at 811 or l-800-552-7001. 

 

Options:  Ask the sign company you’re working with if they contact Miss Utility before they dig.  Ask for the Miss Utility service ticket confirmation to verify that Miss Utility has been contacted.  If the sign company says that they can install your sign the next day, same day or in two days and Miss Utility has not been called, the company may be breaking the law and putting you and your seller at risk!

I.       Prohibited

Bait and switch advertising tactics are prohibited.  Bait and Switch occurs when real property is offered for sale with the intent not to sell at the price or terms advertised.  The Licensee must, in fact, have at least a quantity for sale at that price or terms at the time of the advertising and/or the advertisement must clearly state that the property advertised is limited in specific quantity or for a specified time period.  

 

18 VAC 135-20-300. Misrepresentation/Omission

 

J.       Prospecting

It is a violation of the Code of Ethics Article 16 to solicit by telephone or in person a property owner who has been identified by a real estate sign, multiple listing record, or other information as having exclusively listed their property with another REALTOR®.

 

It is also a violation to solicit by mail or other forms of writing a prospect whose property is exclusively listed with another REALTOR® when that solicitation is directed specifically at property owners who are identified through searching for current listings.

K.    MLS

The company is a member of Bright MLS.  All agents are required to be members in order to list and show properties.  All “For Sale” listings that require placement in a Multiple Listing Service must be entered into the MLS in accordance with the current Rules and Regulations outlined by the Bright MLS regulations. 

L.      Lockboxes

 

Lockboxes are needed for listing agents for sales and rentals if authorized by client and allowed by any homeowner or condo rules.  Lockboxes are available for sale by the Northern Virginia Association of Realtors.  The company might have some in stock for resale.  If you have any questions, please see your Broker.

M.   Photographs/Videos

As per the Virginia REALTORS® listing agreement, the Agent is permitted to take interior and exterior photographs or videos for the purpose of advertising the property to prospective Buyers using multiple listing services, internet sites, or printed media.  Such photographs may be digitized, reproduced, published, transmitted, disseminated, and displayed in any form or manner without limitation by Associates, Brokers, and the MLS in and through online realty information services or other forms of electronic distribution and in books, displays, publications, and newspapers as well as any other use, media, or means to aid in sale of the property.

 

If Associates choose to use a professional photographer or videographer, they must provide written proof (i.e. licensing agreement) of the licensing agreement permitting use of the photographs.

 

Photographs to be placed on the MLS must only include the property.  Photographs on the MLS may not show the company name, logo, agent name or contact information, any people, pets or anything that may show or imply any violation of fair housing laws.

N.    Agent/Owner Advertising

Agents must include a notice in all advertising, including on signs, that the Owner is a real estate Licensee if the Licensee owns or has any ownership interest in the property advertised.  This applies even if the property is listed with a Firm.

 

18 VAC 135-20-190. Advertising by Licensees.

O.    Open Houses

Holding a house open is a licensed activity.  Only a Licensee can hold an open house.

 

18 VAC 135-20-165. Duties of Supervising Broker.

 

Open house directional arrow signs should be placed in accordance with local ordinances.

 

Be sure your family and fellow Agents know where you are and the hours of your open house.

 

Keep the doors locked and greet prospective visitors as they arrive.

 

Never abandon an open house to show other properties and do not close an open house early.

 

Accompany all visitors through the house.  Do not let them wander on their own.

 

Allow all visitors to enter a room before you do.

 

Have prospective Buyers “sign-in,” acknowledging your brokerage relationship and agency representation with the Owners which is disclosed on your sign-in sheet.

 

Do not wear valuable jewelry while sitting at an open house.

 

Do not schedule an open house after dusk.

P.     Procuring Clients

This Firm procures all clients honestly and ethically.  All Associates must do their due diligence to ensure to the extent possible that prospective clients have not already been involved with another agent, whether inside the Firm or not.  

 

It is a best practice when talking to a prospective client to always ask if they have a brokerage relationship with another Agent.  If possible, ask to see the written agreement and/or release.

Q.    Rebates and Incentives

Any rebates, incentives, drawings, contests, etc. used for marketing purposes must be approved by the Broker and must be RESPA compliant.  It is recommended that Agents include a disclaimer in any type of marketing offering a rebate that states rebates are subject to lender approval and noting any other conditions that might apply.  All drawings, lotteries, or contests (not recommended) must adhere to Virginia gaming laws and be approved by Broker in advance.

9.           LISTING PROPERTIES FOR SALE

A.     Required Documentation

All Sellers must provide written proof (i.e. a copy of the title) that they are in fact the legal Owner of the property, with the authority to sell it, and whether anyone else is listed on the title and thus also required to sign legal documents.  Be aware that in cases of death, name changes, marriage, and/or divorce the names and documents may differ.  In that case, the Seller should speak to an attorney to determine what is required.

 

Any corporate entity listed as Owner must provide corporate documents indicating the company name, members, and signatory authority.

 

It is a good practice to verify the number of trusts and/or liens on the property prior to listing. Alert the Seller of the need to present clear title at settlement.  Seller should confirm estimated closing costs with the closing attorney to ensure sufficient proceeds are available to close. 

B.     Items to Convey

Identify items that will or will not convey with the property prior to listing.  This information should be reflected in the listing agreement, MLS listing, and subsequent purchase contract.  If Seller intends to replace certain items or take them when they move, recommend that those items be switched out prior to listing, or at the very least tagged and identified to any potential Purchasers.

C.     Move-Out Condition

Unless the parties agree otherwise, Seller must deliver the property in broom clean condition and exercise reasonable and ordinary care in the maintenance and upkeep of the property between the date of ratification and the date of settlement or occupancy.

D.    Well and Septic

If Seller’s property is served by an on-site well or other natural water source, Seller must provide Buyer with written proof, as per the purchase agreement, that the water is free from contamination and/or lead.

 

E.     Pets

Prior to listing, discuss with the Seller how any pets in the home should be handled during showings.  It is a good practice to put this information in the “Agent only” comments section of the MLS to inform any potential Buyer Agents.  Let the Seller know that they will be responsible for removing or securing any pets prior to scheduled showings or open houses.

F.      Property Security

Prior to listing, find out from the Seller if there is a security system on the property.  Document whether a code is needed to enter, and any additional process required to enter and leave the property.  This information will have to be made available to Buyer Agents showing the property. 

 

If the Seller has audio or video surveillance on the property, ask the Seller if they would like to disclose that to potential Buyers viewing the home.  Disclosure of such a system, although often included in the listing agreement, is not currently required under the law, even if the Seller tells the Listing Agent.  It is possible that audio recording potential Buyers without their knowledge and/or permission could violate federal law.  If your Seller has such a system and would like to continue to use it during showings, they should talk to an attorney about potential liability. 

 

Advise the Seller that while the house is available for sale, there will be strangers touring the property.  Any valuables (i.e. jewelry, antiques, money, etc.), weapons, military insignia, prescription drugs, expensive liquor, or other private items, such as family photographs, should be packed away and kept out of sight.  Although Buyers should be asking permission before taking photographs or videotaping the property, it is likely they will not so the Seller should prepare for this in advance.

G.     Access

Seller is obligated to provide Buyer, Buyer’s professional inspectors and engineers, Buyer’s Agent and brokerage firm, and Buyer’s lender reasonable access to the property to conduct inspections as appropriate and in compliance with the contract, unless the purchase agreement states otherwise.

H.    Homeowner’s Insurance

Seller’s homeowner’s insurance policy should be kept active until settlement.  It is a best practice to keep it active for a few days after settlement in case it is delayed.  If the Seller intends to vacate the property prior to settlement, they should notify the homeowner’s insurance company prior to vacancy and continue to monitor and maintain the property until settlement.

I.       Utilities

Most purchase agreement language states that Seller will have all utilities in service at the time of all inspections conducted, including the final walk-through inspection unless otherwise agreed to by the parties.

J.       HOA/Condo

Owner will disclose in the listing agreement whether the residential property is located in a development subject to the Virginia Property Owner’s Association Act or Condominium Act. 

K.    Listing Agreements

                         i.        Dual/Variable Rate Commissions

A dual or variable rate commission arrangement in a listing agreement occurs when one amount of commission is payable if the Listing Agent’s firm is the procuring cause of the sale, and a different amount of commission is payable if the sale results through the efforts of the Seller or a cooperating Broker.

 

A Listing Agent may be required to disclose this type of commission arrangement in the MLS.  Under the Code of Ethics Article 3, Standard of Practice 3-4, REALTORS® have an affirmative obligation to disclose the existence of dual or variable rate commission arrangements to potential cooperating brokers.  If asked, the Listing Agent must disclose the differential that would result in a cooperative transaction or in a sale through the efforts of the Seller. 

 

                      ii.        Net Listings

Making a listing contract or lease which provides for a “net” return to the Owner, leaving the Licensee free to sell/lease the property at any price he can obtain in excess of the “net” price named by the seller/lessor is an improper brokerage commission under the Regulations and is prohibited.

 

18 VAC 135-20-280. Improper Brokerage Commission.

 

L.      Amount of Commission with Seller

Commissions between agents and clients are negotiable.  The company allows any percentage or amount, even 0%.  However, the company remains potentially liable in all transactions.  Therefore, for any commission with a client that is 0% or any amount less than 2%, the company will be entitled to its share or “split” based upon a 2% commission.  Stated differently, the agent commission would be reduced by agent split times the amount of commission difference under 2%.

10.     BUYER REPRESENTATION

A.     Buyer Agency Agreements

If a Buyer wants to be represented by an Agent in this Brokerage Firm, they must sign a buyer brokerage agreement.  However, a buyer brokerage agreement is not necessary to show property.  It is required once the Buyer requests the Agent’s opinion, discretion, or judgment as a licensed real estate salesperson.

 

As a Buyer’s Agent, neither the Licensee nor the Buyer client should ever attempt to contact the Seller directly.  All communication must go through the Listing Agent or the Listing Agent’s brokerage firm.

B.     Showing Property

All showings must be in accordance with MLS instructions.  Review the showing instructions in the MLS to ensure that you are aware of any special showing instructions (i.e. security systems, pets, etc.).  When at all possible, showings should be by appointment.  When showings of occupied dwellings are requested, it is preferable to give the Owner at least 24 hours’ notice prior to the appointment time.  In the event you are not able to make your appointed time, it is preferable to contact the Listing Agent and inform them of the cancellation.

 

A licensed real estate salesperson must accompany prospective Buyers on any showings unless the Seller has agreed otherwise in writing.

 

When possible, accompany your Buyer clients to open houses, new construction neighborhoods, and on all showings.  If you are not able to accompany your Buyers, provide them with some sort of documentation and/or business cards and instruct them to notify the person showing the property that they are represented by a licensee.

 

Properties should be left as you found them (i.e. doors locked, windows closed, lights on or off, pets in or out, etc.).  Do not allow your clients or their children to wander around the property unattended.  If a problem arises during the showing or you notice something upon arrival, call the Listing Agent and your Broker immediately.

 

                        i.         Audio/Video Surveillance

Counsel your clients/customers that an Owner may have audio and/or video surveillance on the property that has not been disclosed.  Any conversations about the property or a potential offer should be held until after everyone has exited the property.  Such equipment must be disclosed in listings.

 

                          ii.    Photography/Video

Prior to visiting properties, ask your Buyer clients/customers if they are planning on taking photographs and/or videos of the property.  Without Seller permission this is likely unauthorized access to the property.  If the potential Buyer would like to use technology to document the property, contact the Listing Agent to obtain the Seller’s permission prior to the showing appointment.

C.     Agent Safety

 

Avoid meetings and property showings at potentially unsafe times.  Agents must consider their own safety and the safety of their prospects when arranging for meetings and showings.  The times considered safe or unsafe may vary widely depending upon the circumstances.  Generally, agents might try to schedule showings of vacant properties at times when neighbors are likely to be at home, and bring along another Agent for after-dark showing of properties or for showing vacant properties at any time of the day.

 

Use your own car to show properties and do not ride in the prospect’s car.

 

When unusual or suspicious incidents occur during the course of business, Agents must report them immediately to their own offices, clients, the police, and any neighboring affiliated offices.

 

D.    Amount of Commission with Buyer

 

 

 Commissions between agents and clients are negotiable.  The company allows any percentage or amount, even 0%.  However, the company remains potentially liable in all transactions.  Therefore, for any commission with a client that is 0% or any amount less than 2%, the company will be entitled to its share or “split” based upon a 2% commission.  Stated differently, the agent commission would be reduced by agent split times the amount of commission difference under 2%.

11.     CONTRACTS

A.     Contracts

All contracts for real property must be in writing and signed by all parties to be enforceable.  This is often referred to as the Statute of Frauds.

 

 

Any licensed real estate salesperson may prepare written contracts for the sale, purchase, management, or rental of real estate provided the preparation of such contracts is incidental to a real estate transaction in which the licensee (i) is involved and (ii) does not charge a separate fee for preparing the contracts.

 

 

B.     Purchase Offers

Prior to writing an offer, it is a best practice to contact the Listing Agent and print a current copy of the MLS listing to confirm the property’s status and the compensation being offered.  Send this copy to the Listing Agent with the offer to purchase, and retain a copy in the file. 

 

The Licensee must go over all contracts, addenda, and attachments thoroughly to ensure that the client/customer(s) understands the implications of the documents that they are signing.  All offers must be in writing, on the most current forms, signed by all parties and accompanied by the appropriate fees and deposit(s). 

 

All offers and purchase agreements must include the complete terms and conditions of the real estate transaction and identify all those who are holding any deposits.

 

18 VAC 135-20-300. Misrepresentation/Omission.

 

After a contract has been accepted by all parties, any changes must be made by amendment or addendum.  Any deletions, additions, changes, or extensions must be agreed to in writing and signed or initialed by all parties.  The changes and/or initials must be dated and new copies must be immediately delivered to all parties to the transaction.

 

The Agent must make copies for the client(s)/customer(s) of every signed document, including copies of any deposit(s).

 

As soon as the clients have signed any of the forms below, copies must be given to the Broker so that they may review it, sign it if applicable, and send you a ratified copy for you and your clients.  These agreements are not valid until both parties have signed them:

 

  • Exclusive Authorization to Sell Agreement
  • Exclusive Right to Represent Buyer Agreement
  • Amendments and/or Addenda
  • Commission Changes

C.     Presenting the Offer

REALTORS® must submit all offers and counter-offers to their clients objectively and as quickly as possible.  (NAR COE Article 1, SOP 1-6 Amended 1/95).  It is a best practice for the Buyer’s Agent to contact the Listing Agent once an offer is ready to be presented.  Always request a written confirmation of delivery receipt from the Listing Agent, whether by email or text message. You may also submit a written request to the Listing Agent that confirming they presented your offer to the Seller. Upon receipt of a written request the Listing Agent must provide you with a written affirmation that the offer has been submitted to the Seller or written notification that the Seller has waived the obligation to have the offer presented. (NAR COE Article 1, SOP 1-7, Amended 1/20).

 

Generally, the Buyer may withdraw an offer at any time prior to receiving a counteroffer or ratification.  A withdrawal should be communicated immediately and confirmed in writing.

 

The Listing Agent must explain the implications of the terms of the contract(s) and may give advice to their client, but must not give legal or tax advice.  The Seller makes the final decisions regarding contract terms and acceptance.

D.    Multiple Offers

A Listing Agent must receive and present in a timely manner written offers and counteroffers to and from the Seller and Purchasers, even when the property is already under contract.  Under the REALTOR® Code of Ethics Article 3, Standard of Practice 3-6, REALTORS® must disclose the existence of accepted offers, including those with unresolved contingencies, to any broker seeking cooperation.

 

A REALTOR® cannot disclose the existence of multiple offers, if none have been accepted, without the Seller’s permission.  It is recommended that you get this permission in writing, and at the time of the requested disclosure, even if the question was originally included in the listing agreement.  If the Seller permits the Agent to disclose, and the Agent is asked what Firm is representing the other offers, the Agent must also disclose whether the other offers are represented by the Agent, the Agent’s Firm, or a separate Firm.

E.     Counter Offers

If the Sellers make a counter-offer, have the Sellers sign/initial and date the original purchase agreement where each change is noted.  Leave a copy with the Sellers and immediately present the counter-offer to the Buyer’s Agent.

 

Counter-offers are to be considered as a new offer for all parties.  The Agents are responsible for prompt follow-up on all counter-offers.  If the counter is accepted, all initials must be executed in the proper place with the date of ratification indicated.  The Agent for the other party must be promptly notified, and then the Agent must immediately notify their client.  If a counter-offer is not accepted by one party, the other party and their Agent (if applicable) must be notified promptly.  “Rejected” should be written across the face of any rejected offer, and must be dated and signed.  Copies must be delivered to all parties.

F.      Ratification

Offers become contracts when ratification occurs.  Ratification occurs when final acceptance of all the terms of the contract is delivered to the party that presented the last offer (or counter-offer); not the date of expiration or removal of any contingencies or the date the contract was signed. Final acceptance should be provided in writing.  Some contracts in Virginia require physical delivery and others do not.  Always check the language of the contract with which you are working.  If other offers were presented, Listing Agents shall notify all Purchaser Agents of the status of their offer(s).  Because the contract is not a legally binding document until it is both ratified and acceptance is delivered, copies of the accepted contract (ratified) must be delivered to all parties promptly, preferably on the same day the contract is ratified.

 

                        i.         Electronic Signatures

Virginia has adopted the Uniform Electronic Transactions Act (UETA), which standardizes electronic transactions laws across the U.S. The law applies only to transactions between parties who have agreed to conduct transactions by electronic means. UETA states that to determine whether the parties have agreed to conduct the transaction electronically, you must look at the context and surrounding circumstances, including the parties’ conduct. This means that if your client accepts a document electronically or with an electronic signature, they have demonstrated agreement to conduct that transaction electronically. In other words, if the parties are using electronic signatures, then they have consented to conducting the transaction by electronic means.

 

So long as the parties are otherwise performing under the contract, failing to initial the electronic signatures paragraph will not invalidate the contract, prohibit the parties from conducting the transaction electronically, or require parties to go back and initial the paragraph at a later date. To reduce your risk, get all parties to initial the paragraph, but missing initials won’t derail the transaction.

G.     Contract to Settlement

As soon as a contract is ratified, the Listing Agent must change the status of the listing in the MLS in accordance with MLS regulations.  If the sale is not consummated, and the listing has not expired, update the listing to an appropriate status.

 

After a contract has been accepted by all parties, never make any changes to the contract except by amendment.  Any deletions, additions, changes or extensions must be agreed to in writing and signed by both the Sellers and Purchasers to be enforceable.  The changes must be dated and copies must be immediately delivered to all parties to the transaction.

 

Buyer Agents should advise the Buyers to take immediate steps to make loan application, and arrange any inspections (home inspection, radon, lead-based paint, well & septic, termite, etc.).  Full communication between the Agents and their clients will prevent confusion and duplication of effort.  Keep everyone advised of the status and progress of the contract.  Agents should coordinate the date, time and place of settlement with all parties under direction and/or approval of their clients.

 

At no time are the Purchasers to be given a key for access to the property without written permission from the Sellers.  The Purchasers must not be allowed entry to the property prior to settlement unless accompanied by a Licensee, with the permission of the Sellers, and pursuant to the terms of the Contract.

 

Transfer of keys, garage door openers, and parking passes to the property should be made from the Sellers to the Purchasers at settlement, unless otherwise agreed to by both parties. 

H.    Termination and Release

A release is a mutual act of the parties by which one or more of the parties are released from obligations under the contract pursuant to whatever agreements the parties have reached.  Sending a release is akin to asking for permission to be released from the contract.  There is no right to a release; both buyer and seller must sign the release for it to be effective.

 

A termination is generally the unilateral act of a party declaring the contract at an end.  A termination of this sort does not rely upon the agreement or permission of the other party and is only valid if the party terminating is exercising a termination right set forth in the ratified contract.  Termination may end the contract, but it does not release the parties from liability (i.e., they still may sue each other if one party feels the other party has defaulted on the contract).  If one party has chosen to terminate a contract, BOTH a notice of termination and a release should be sent to the other party. 

 

If a party has a termination right under the contract, and the contract language states who shall receive the earnest money deposit, a broker may release the funds to the party who is entitled to receive the EMD in accordance with the clear and explicit terms of the contract. However, if the contract is silent as to who shall receive the earnest money deposit, the broker is not confident that the contract is clear and explicit, or the EMD is being held by someone other than a real estate broker, a signed release may be required before the EMD is released. A release also protects all parties from any lingering liability under the contract.

I.       Time is of the Essence

“Time is of the essence” is a phrase used in a contract to mean that performance by one party at or within a specified period is necessary to enable that party to require performance under the contract by the other party. Failure to act within the time required constitutes a breach of contract.

13.     INSPECTIONS

A.  Home Inspection

It is a best practice for Buyers to order and perform a home inspection as soon as possible after contract ratification.  A Licensee should supervise any individuals who are not real estate licensees (i.e. home inspector, clients, etc.) while they are inside the property.  If the Licensee is unable to supervise, the Seller must provide written permission allowing the unlicensed individuals to access the property. The Licensee has no duty to investigate the property for defects.

B.  Termite Inspection

Sellers are obligated to provide the Buyer with a report from a wood infestation control company concerning the presence of or damage from termites or other wood destroying insects in the primary dwelling.  If the Buyer would like additional structures on the property inspected, those will need to be added to the purchase offer. The timeframe for this inspection is often set by the Buyer’s lender, but is most often within thirty days of closing.

 

If the inspection reveals an active infestation, Seller must have the infestation treated.  If the inspection reveals damage caused by wood destroying insects, the damage must be repaired.

 

Always read the language in any purchase offer to determine what type of pest control and/or contractor can be used and if there is a monetary limit for repairs.  It is a best practice to require the pest control company and contractor be licensed and insured.

C.   Pre-Settlement Walk Through Inspection

For the protection of both the Buyers and the Sellers, the Buyer’s Agent should encourage Buyers to perform a complete walk-through inspection of the property prior to settlement.  The purpose of the inspection is to verify that all repairs negotiated as part of the contract and/or home inspection have been completed and that no material damage or changes necessitating repairs have occurred to the property. 

 

The Buyer is not entitled to have the Seller correct defects noted at this final inspection if they existed prior to the overall home inspection and were not reported to the Seller or negotiated as part of the contract.

 

The Buyer’s Agent must accompany the Purchasers on the inspection and may guide them, but must not perform the inspection.  The Purchasers may want to consider employing a home inspector or appropriately certified technician to confirm the negotiated repairs were completed and satisfactory.

 

The Listing Agent should remind the Sellers to be completely out of the property prior to the time of settlement, unless there is a written, post-settlement occupancy agreement.

 

Promptly notify the Listing Agent and the settlement agent of any walk-through deficiencies.  Any deficiencies must be resolved between the parties.  If there are walkthrough items to be negotiated or discussed prior to closing, Agents should attempt to mediate a successful resolution prior to coming to the table.  A copy of any agreements must be given to both Agents, the Purchasers, the Sellers, and the settlement agent.

 

If funds are withheld for repairs, a written agreement should be reached addressing whose responsibility it is to see that the repairs are taken care of, the timeframe for completion, who can complete the repairs, and how the bills will be paid.  The entity holding the repairs escrow should be notified in writing when the repairs are completed so that the Sellers can be given the balance of funds due them.

 

                        i.         Post-Settlement Occupancy Inspection

When there is a post-settlement occupancy (seller occupancy, also known as a “rent-back”) agreement, a preliminary walk-through inspection should be done shortly before settlement.  An additional final walk-through inspection should be done promptly after the Seller has vacated the property and before release of the deposit. 

14.   HOA/CONDO ASSOCIATIONS

A.     Property Owners’ Association Act

The Property Owners’ Association Act (“POA Act”) applies to developments subject to a declaration recorded after January 1, 1959, associations incorporated or otherwise organized after that date, and all subdivisions created under the former Subdivided Land Sales Act.

 

 

 

                         i.        Definitions

A “declaration” is any instrument recorded in the county or city in which the development is located, that either (i) imposes on the association maintenance or operational responsibilities for the common area or (ii) creates the authority in the association to impose on lots, or on the owners or occupants of such lots, or on any other entity any mandatory payment of money in connection with the provision of maintenance and/or services for the benefit of some or all of the lots, the owners or occupants of the lots, or the common area.

 

 

                         ii.       For Sale Signs

Unless authorized in the POA’s bylaws, no association can require the use of a For Sale sign that does not comply with the requirements of the VREB.

 

An association can regulate the placement of signs in common areas, the number of signs located on the property (so long as one sign is permitted), the location of signs on the Owner’s property (so long as it complies with the VREB requirements), the manner in which the sign is affixed to the property, and the period of time after settlement when the sign(s) must be removed.

 

 

                      iii.      Power of Attorney

No association can require an Owner to execute a formal power of attorney if the Owner designates a real estate Licensee as their authorized representative.  If the Owner provides the association with signed written authorization designating the representative, the association must recognize it.

 

 

B.     Condominium Act

This Act applies to all condominiums in the Commonwealth of Virginia.  A condominium is defined as real property with lawfully recorded condominium instruments with the undivided interests in the common elements vested in the unit owners.

 

 

Any provisions of the Act, or rights conferred by it, cannot be varied or waived, even by agreement of all parties, unless allowed under the law.

 

 

The unit owners’ Association shall have the power, to the extent the condominium instruments expressly so provide, to limit the number of persons who may occupy a unit as a dwelling.  Such limitation shall be reasonable and shall comply with Fair Housing laws.

 

 

                     i.            For Sale Signs

The Condo Association is prohibited from requiring the use of a for sale sign that is (i) a Condo Association sign or (ii) a real estate sign that does not comply with the requirements of the Virginia Real Estate Board unless it is stated in the Association Bylaws. 

 

A Condo Association may, however, prohibit the placement of signs in the common elements and establish reasonable rules and regulations that regulate (a) the number of real estate signs to be located on the Owner’s property, so long as at least one real estate sign is permitted; (b) the geographical location of real estate signs on the Owner’s property, so long as the location of the real estate signs complies with the requirements of the Virginia Real Estate Board; (c) the manner in which real estate signs are affixed to the property; and (d) the period of time after settlement when the real estate signs must be removed.

 

 

                  ii.            Power of Attorney

A Condo Association is prohibited from requiring an Owner to execute a formal power of attorney if the Owner designates a real estate Licensee as the Owner’s authorized representative.  The Association shall recognize such representation without a formal power of attorney, provided that the Association is given a written authorization signed by the Owner.  

 

 

C.      Resale Disclosure Act

                        i.         Contract Disclosures

Unless otherwise exempt, any contract for the resale of a unit in a common interest community the Owner must disclose in the contract that the unit is located in a common interest community, the seller must obtain a resale certificate and provide it to the purchaser, that the purchaser may request an updated resale certificate, and the purchaser’s right to receive the resale certificate and the right to cancel the contract are waived if not exercised before settlement.

 

 

                         ii.       Resale Certificate

The Seller must obtain a resale certificate from the Association and provide it to the Purchaser.  The Listing Agent often orders the disclosure packet from the association.  It is a good practice to get the Owner’s authorization in writing prior to providing this service.  The right to receive the resale certificate is waived conclusively if not exercised before settlement.

 

The resale certificate shall be delivered in accordance with the written request and instructions of the Seller or the Seller’s authorized agent, including whether the resale certificate shall be delivered electronically or in hard copy, and shall specify the complete contact information for the parties to whom the resale certificate shall be delivered. The resale certificate shall be delivered within 14 days of receipt of such request.

 

 

                      iii.       Updated resale certificate

If a resale certificate was issued more than 30 days but less than 12 months before settlement, the seller or buyer, may request an updated resale certificate.

 

 

                       iv.       Right to Cancel

The Purchaser may cancel the contract within three days, or up to seven days if extended by the ratified real estate contract, after receiving the resale certificate or being notified that the resale certificate will not be available.  The right to cancel the contract is waived conclusively if not exercised before settlement. If the resale certificate or notice of its unavailability is received prior to contract ratification, the Purchaser may cancel the contract within three days of the date of the contract.

 

Purchaser has six days, or up to ten days if extended by the ratified real estate contract, after the postmark date to cancel the contract if the resale certificate or notice is sent by U.S. mail.

 

The Purchaser may cancel the contract at any time prior to settlement if the Purchaser has not been notified that the resale certificate will not be available and the resale certificate is not delivered to the Purchaser.

 

If the unit is governed by more than one association, the Purchaser’s right of cancellation may be exercised within the required time frames following delivery of the last resale certificate or disclosure packet.

 

Notice of cancellation shall be provided to the Owner or his Agent by one of the following methods:

  1. Hand delivery;
  2. United States mail, postage prepaid, provided the sender retains sufficient proof of mailing, which may be either a United States postal certificate of mailing or a certificate of service prepared by the sender confirming such mailing;
  3. Electronic means provided the sender retains sufficient proof of the electronic delivery, which may be an electronic receipt of delivery, a confirmation that the notice was sent by facsimile, or a certificate of service prepared by the sender confirming the electronic delivery; or
  4. Overnight delivery using a commercial service or the United States Postal Service.

In the event of a dispute, the sender shall have the burden to demonstrate delivery of the notice of cancellation. Such cancellation shall be without penalty, and the unit owner shall cause any deposit to be returned promptly to the Purchaser.

 

 

iv.  Fees.

Unless otherwise provided for by the association, fees must be paid when the resale certificate, updated resale certificate, or financial update is requested. The seller is responsible for all fees associated with the preparation and delivery of the resale certificate, including any fees for inspection of the unit. The requesting party is responsible for any fees for the preparation and delivery of the updated resale certificate or financial update.

 

Associations must publish and make available a schedule of the applicable fees.

 

No association may collect fees authorized by the law unless the association is registered with the Common Interest Community Board, is current in filing the most recent annual report and fee with the Common Interest Community Board, is current in paying any assessments made by the Common Interest Community Board, and provides the option to receive the packet electronically.

 

 

                                                                      iii.            Exceptions

The resale certificate is not required in the case of:

  • Initial disposition by a declarant;
  • A disposition of a unit by gift;
  • A disposition of a unit pursuant to court order;
  • A disposition of a unit by foreclosure or deed in lieu of foreclosure; or
  • A disposition of a unit by a sale at auction, when the resale certificate was made available as part of the auction package for prospective purchasers prior to the auction.
  • 55.1-2317. Exemptions.

15.   TROUBLESHOOTING

Immediately report any problems to the Broker that pertain to:

  • A party to a transaction, where at least one side is represented by the brokerage Firm, having complaints involving their real estate transaction.
  • Automobile accidents occurring while the Agent is participating in real estate brokerage transactions.
  • Criminal charges against the Agent.
  • Civil lawsuits or administrative actions involving real estate brokerage transactions in the Firm.
  • Any decision to file suit for commissions on behalf of the Firm, or to file an arbitration request concerning such commissions, shall be the sole decision of the principal broker on a case by case basis.
  • Should any lawsuits or threat of lawsuits result in legal or court costs, such expenses shall be shared by the Firm and the Agent in an amount determined by the Broker considering the nature of the Agent’s participation and the nature of the lawsuit. This decision shall remain with the principal broker and will be made on a case by case basis.
  • Contacts concerning disciplinary actions or other purposes.
  • Party default under a ratified contract.
  • Threatened legal or administrative actions involving the parties and/or a real estate transaction.
  • Acts of possible discrimination committed by Agents, Associates, or parties to transactions.
  • Unresolved disputes between Agents, within or outside the Firm
  • Physical injuries within the office or while in performance of services or duties in the name of the Broker.
  • Local Board/Association contacts concerning disciplinary action or other purposes.

16.    Other

A.     Agent Transactions

Licensees who are a principal to a transaction must comply with all laws, regulations and policies as though they were not involved in the transaction.

 

 

Agents may not provide property management services.  Agent should contact company for any potential property management services desired or requested by a client.

 

Our coverage is $250K/person. We need to raise it, or else lower this number here.

 

Paul, our coverage is $500,000 per accident.