Recently, the majority of NVAR Legal Hotline inquiries have involved rental transactions. Most often, agents receive questions from former landlord or tenant clients well into the lease term — usually when an issue arises months after the lease has been signed.
Here’s the key point many agents don’t realize:
Once the lease is signed, the agent’s relationship in a rental transaction ends — unless there is a signed Property Management Agreement in place. That agreement creates a new and ongoing relationship. Without it, you are no longer acting as the client’s agent.
Where do agents get into risky territory?
Problems arise when agents continue providing guidance after their agency relationship has ended. Even well-intentioned advice can blur lines and create unintended liability.
Some best practices:
- Refer landlords and tenants back to the lease.
- Avoid getting involved in communications between landlord and tenant.
- Refrain from interpreting lease provisions for either party.
- When the situation becomes complex or contentious, recommend they seek advice from an attorney who can represent them directly.
The Bottom Line
The Legal Hotline is there to help you understand contracts, statutes, and best practices — not to step into disputes. Knowing where your agency relationship begins and ends is essential to protecting both your clients and your business.
Submit a question to the Legal Hotline at nvar.com/hotline and hear back in one business day.
