What triggers an intermediary relationship in a leasing transaction?

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06/04/2015 | Author: Editorial Staff

I’m the listing agent for an owner leasing his single-family home. We both signed the Residential Real Estate Listing Agreement, Exclusive Right to Lease (TAR 1102). A prospective tenant called me to ask questions about the property and request a rental application. If I provide the rental application to the prospect, will this trigger an intermediary relationship?

No. Merely discussing the listing and providing the rental application will not trigger an intermediary relationship. However, if the prospective tenant requests that you represent her in the lease negotiation process, you will need to obtain her written consent for your broker to act as an intermediary. You can use the Residential Buyer/Tenant Representation Agreement (TAR 1501) for this purpose. Then you’ll need to comply with the steps required for an intermediary relationship, which apply to both sales and leasing transactions.

Find more answers to legal questions on texasrealestate.com.

Categories: Legal
Tags: legal faq, leasing, property management


Mike McEwen on 06/08/2015

I did not file a complaint w/ TREC because I had seen the incorrect assignment in the copy of a contract I was given for a broker’s opinion of value I was doing.  Perhaps I should have said something to the broker.

Richard Weeks on 06/08/2015

Mike McEwen, yes that is.  I hope you took time to write a complaint to TREC and sign it.

Mike McEwen on 06/05/2015

I have seen contracts where the broker has assigned him/herself to work w/ one of the parties.  That is a violation of the law.

Richard Weeks on 06/05/2015

It is also apparent that some agents don’t understand intermediary with appointments, and without appointments.

Come TAR attorneys chime in.

Mike McEwen on 06/05/2015

A legal fiction is something that is permitted that cannot be done.  Why do you think attorneys are not allowed to represent opposing parties.  A lawyer may not represent both the husband and wife in a divorce.  The word represent implies a fiduciary responsibility, i.e., agency.  It is amazing that so many do not understand that.  I do not believe the TAR attorney whom I quoted is still w/ TAR and I doubt that a TAR attorney will join this conversation.  Intermediary is all about keeping the commission under one roof.

Richard Weeks on 06/05/2015

I would love to know where that TAR lawyer went to law school.  Perhaps a TAR lawyer might monitor this blog and give us their opinion if “Intermediary is a legal fiction.”

Mike McEwen on 06/05/2015

I am the broker and do not permit Intermediary of any kind in my company.  If a buyer wants to buy one of my company’s listings I explain to him that I represent the best interests of the seller as it relates to negotiating the purchase, but that I must be fair and honest w/ him, e.g., I will disclose all know defects and any issues that might affect the buyer’s intended use of the property.  I tell the buyer that, if he absolutely needs a licensee to go to bat for him—even though it will cost me half the commission—he will have to go to another broker for representation.  In 26 years in the business I may have had three buyers to seek out another broker.  I believe the rest of them found my honesty and frankness to be a breath of fresh air.  As one of the TAR lawyers once said:  “Intermediary is a legal fiction.”  It is impossible to represent parties on opposite sides of the table.  It is illegal for lawyers to do it, but the real estate lobby wanted to be able to keep both sides of the commission under one roof, so TREC caved into it.

Richard Weeks on 06/05/2015

According to the Texas Real Estate License Act there is noting wrong with doing an in house transaction.  If you are concerned do it with appointments; however there are some transaction when the buyer and seller agree do intermediary without appointments.  What is your borkers policy?

Mike McEwen on 06/05/2015

You need the representation agreement and the intermediary assignment document.  But you should not do intermediary because you are representing absolutely nobody but yourself and your pocketbook.

Misse Keller on 06/05/2015

How about the situation where you’re the owner (and licensee)?  Does that need anything besides IABS?

Mike McEwen on 06/04/2015

Intermediary:  The equivalent of the prosecutor representing the accused.

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Legal disclaimer

The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on texasrealestate.com. Any legal or other information found here, on texasrealestate.com, or at other sites to which we link, should be verified before it is relied upon.

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