Texas REALTORS® 2018 Winter Meeting | Feb. 9-13 | Austin, Texas

Legal FAQs for REALTORS® — Landlord-Tenant Issues
Intermediary Relationships in Leasing Transactions

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Legal disclaimer

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? (updated June 3, 2015)

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.

The same prospective tenant was approved and is now three months into his lease. He just contacted me because he's interested in purchasing the property. The tenant requested that I represent him in the purchase of the property. How do I represent the tenant if I already represent the owner? Can my broker be appointed to represent the tenant?

These facts will trigger an intermediary relationship. Since you represent the seller, you need to verify that the listing agreement permits your broker to act as an intermediary. If so, the tenant will also need to give written consent for an intermediary relationship. The Residential Buyer/Tenant Representation Agreement (TAR 1501) is sufficient for obtaining written consent. Next, you will need to determine whether it's the policy of the brokerage firm to appoint licensees to each side. If so, the broker is prohibited from appointing himself to represent the tenant. The broker will need to appoint another agent within the brokerage firm to represent the tenant. If appointments are made, the owner and the tenant will need to be provided with written notice of the appointment. The Intermediary Relationship Notice (TAR 1409) serves this purpose. Appointments are not mandatory, but they allow licensees to provide advice and opinions to the parties.

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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