Legal FAQs for REALTORS® — Agency
Agency Notices

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Legal disclaimer

What information related to agency are license holders required to provide under The Real Estate License Act? (updated September 7, 2016)

License holders have two requirements under Section 1101.558, Representation Disclosure, of The Real Estate License Act:

• To disclose which party they represent to other parties or license holders who represent another party in a proposed real estate transaction

• To provide information about brokerage services to prospective buyers, sellers, tenants, and landlords.

The first requirement is a disclosure, which can be provided orally or in writing. The second requirement is a written notice, which must be provided to prospective parties to a proposed transaction for a property through the Information About Brokerage Services form promulgated by the Texas Real Estate Commission.


Does Section 1101.558 of The Real Estate License Act apply only to residential real estate sales transactions? (updated September 7, 2016)

No. The Real Estate License Act requirements apply to other types of real estate transactions, including leasing, commercial, new home, and farm and ranch sales.


Does providing the Information About Brokerage Services form meet The Real Estate License Act’s requirements to disclose agency? (updated September 7, 2016)

No. These are two separate requirements. The IABS form is does not meet the law’s requirement to disclose representation of a party.


When and how should license holders disclose who they represent under The Real Estate License Act’s requirements to disclose agency? (updated September 7, 2016)

A license holder must disclose which party she represents at the first contact with another party or another license holder representing a party in a proposed transaction. For example, disclosure must be provided when a seller’s agent meets the buyer (who is unrepresented or working with an agent), or when a buyer’s agent meets the seller’s agent. In either scenario, the disclosure can be oral or in writing, but it’s easier to prove you’ve made the disclosure if it’s in writing. There is no required language for this disclosure.


What should I do if I’m representing a seller and an unrepresented buyer who does not want to be represented approaches me about the property? (updated September 7, 2016)

To meet the requirements of Section 1101.558 of The Real Estate License Act, you will need to disclose either orally or in writing who you represent at first contact with the buyer. Of course, it will be easier to prove you’ve provided this disclosure if it’s in writing. You’ll also need to provide the buyer with the Information About Brokerage Services form upon first substantive communication regarding a property.


When and how should license holders provide the Information About Brokerage Services form? (updated September 7, 2016)

At the first substantive communication with a party about a property, a license holder must provide the Information About Brokerage Services form (TAR 2501, TREC IABS 1-0). The IABS form is promulgated by TREC to satisfy The Real Estate License Act’s requirement that a license holder provide written notice in at least 10-point font that:

• Describes the ways a broker can represent a party to a real estate transaction, including as an intermediary

• Outlines the basic duties and obligations a broker has to a party the broker represents

• Provides the name, license number, and contact information for the license holder and the license holder’s supervisor and broker, if applicable.


Are there any exceptions for providing the Information About Brokerage Services form? (updated September 7, 2016)

Yes. A license holder is not required to provide the notice if any of these situations applies:

• The proposed transaction is for a residential lease of less than one year and a sale is not being considered

• The license holder meets with a party who the license holder knows is represented by another license holder

• The communication occurs during an open house for any prospective buyer or tenant and the communication concerns that specific property.


Does the Texas Real Estate Commission have rules about how to deliver the Information About Brokerage Services form? (updated September 7, 2016)

Yes. The IABS form can be delivered in the following ways:

• Personally delivered by a broker or sales agent

• Through first-class mail or overnight common carrier delivery service

• In the body of an email

• As an attachment to an email, or a link within the body of an email, with a specific reference to the form in the body of the email, which is the part above your name and contact information in your signature block.


Can I provide the Information About Brokerage Services form only electronically? (updated September 7, 2016)

Yes. You may do so in the body of an email. You can also add it as an attachment to an email or a link within the body of an email, as long as there is a specific reference to the form in the body of the email above your name and contact information. License holders can reproduce the IABS form provided that the text is copied verbatim and the spacing, borders, and placement of the text appears identical to that of the published IABS form, except you should complete the Broker Contact Information section.

Here’s an example of an appropriate way to link to the IABS form in an email:

Hi John,

I’m thrilled Sally referred you to me and I’d love to help sell your home. I always give a listing presentation to prospective clients. Do you have time to meet on Saturday so I can explain what my services entail?

By the way, Texas law requires all license holders to provide the Information About Brokerage Services form to prospective clients. Please review the linked document before we meet.

Thanks,
Jane Doe, REALTOR®
1234 Main St.
800-555-1213

 

Note that the hyperlink above goes to a blank IABS form. You must link to an IABS form that has your information in the Broker Contact Information section to comply with the law. Find information on how to link to your completed form in the May 2016 issue of Texas REALTOR® magazine.


Does a link to the Information About Brokerage Services form in my email signature block count as electronic delivery? (updated September 7, 2016)

No. A link to the IABS form in a footnote or email signature block does not meet The Real Estate Licensing Act’s requirements.


Do I have to put a link to the Information About Brokerage Services form on my website? (updated September 7, 2016)

Yes. TREC rules require all active real estate brokers and sales agents to provide a link to the IABS form in a readily noticeable place on the homepage of their business website. The link must say “Texas Real Estate Commission Information About Brokerage Services” and must be in at least 10-point font. This requirement is in addition to the delivery requirements.


Do I have to provide a link to the Information About Brokerage Services form on my business’s social media channels? (updated September 7, 2016)

It depends. Brokers and agents must provide a link to the IABS form on their business website. According to the Texas Real Estate Commission, a business website means a website used to attract or conduct real estate brokerage activity. This may include a business Facebook page or other social media channels you use for business.


If I have links to the Information About Brokerage Services form on my website and provided it via email in compliance with the Texas Real Estate Commission rule, do I still need to deliver the form in person? (updated September 7, 2016)

No. If you’ve provided a link on your business website and delivered the form electronically according to the requirements (see TREC rule 531.20), you do not have to provide it again in person.


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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