Legal Blog - Agency


What is a limited service agent?

Aug 9, 2016


Question: What is a limited service agent?

Answer:  A limited service agent is an agent who performs limited services selected by the client. This can only be done pursuant to a written brokerage agreement in which the limited service representative (i) discloses that the licensee is acting as a limited service representative; (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 that the limited service representative will not provide to the client.

Such disclosure shall be conspicuous and printed either in bold lettering or all capitals, and shall be underlined or in a separate box. In addition, a disclosure that contains language that complies substantially in effect with the following shall be deemed in compliance with this disclosure requirement:

“By entering into this brokerage agreement, the undersigned do hereby acknowledge their informed consent to the limited service representation by the licensee and do further acknowledge that neither the other party to the transaction nor any real estate licensee representing the other party is under any legal obligation to assist the undersigned with the performance of any duties and responsibilities of the undersigned not performed by the limited service representative.”

If a Buyer Agent is unable to contact the Listing Agent, or fails to receive a response after repeated attempts to contact the Listing Agent, can the Buyer Agent directly contact the Seller? When is it permissible for a Buyer's Agent to contact the Seller directly?

The restriction on contacting the clients of other agents comes from Article 16 of the Code of Ethics and Standards of Practice of the National Association of REALTORS®. Article 16 states that “REALTORS® shall not engage in any practice or take any action inconsistent with the agency or other exclusive relationship recognized by law that other REALTORS® have with clients.” In support of this Article, Standard of Practice 16-13 also states that “All dealings concerning property exclusively listed, or with buyer/tenants who are subject to an exclusive agreement shall be carried on with the client’s agent or broker, and not with the client . . .” This is generally known as the prohibition against ‘going behind the sign.’

However, there are some exceptions to this rule that are contained in the Standards of Practice under Article 16.

Standard of Practice 16-13
The most common example is in the second part of Standard of Practice 16-13 that states: “Except with the consent of the client’s agent or broker or where such dealings are initiated by the client.” The Listing Agent can give the Buyer’s Agent permission to contact the seller. This permission can be broad or narrow, depending on the Listing Agent’s preference. 
One common example of narrow permission is when a Listing Agent states in MRIS that the cooperating agents should contact the seller prior to showing the property. I would remind everyone that this permission is limited to calling to arrange a time when the agent can show the property to the prospective buyers. This permission does not extend to having a discussion about the terms or conditions the seller is interested in seeing in the contract. 
One example of broad permission is when a Listing Agent states in the MRIS that all contract negotiations are to be conducted directly with the seller. In this example, a discussion about the terms or conditions that the seller is interested in seeing in the potential contract is permitted.

Standard of Practice 16-2
This exception allows agents to make general advertisements (mass mailings, telephone cold calls, etc.) as long as the advertising is not targeted to individuals who have been identified by a real estate sign, multiple listing compilation or other information source that indicated that the person receiving the advertising was already represented by another agent.

Standard of Practice 16-3
You may contact the client of another broker to offer a different type of real estate service. For instance, if the other broker has an exclusive right to sell agreement, you may talk to the client about obtaining an exclusive right to lease or about an exclusive right to represent buyer agreement. However, you may not use information from an MRIS compilation to identify and target the clients of other brokers.

Standards of Practice 16-4 and 16-5
You may not solicit a listing that is currently listed with another broker. If the other broker refuses to disclose the expiration date and type of agency agreement (open listing, exclusive right to sell, etc.) the agent has with the client, then a REALTOR® may contact the client to obtain this information. Please note that the exception only exists if the broker refuses to provide this information. If the information is provided, the REALTOR® would not be allowed to contact the client directly. Brokers may establish reasonable rules for releasing information about their listings that other brokers may need to follow (all requests must be in writing, must be made directly to the sales manager or main office, etc.), and these rules do not constitute a refusal unless they were viewed as unreasonable.

Article 16 and the related Standards of Practice have created a few exceptions to the general rule against contacting another Broker’s client directly. However, none of them appear to authorize the Buyer Agent to contact the seller when a Listing Agent fails to respond.

Always first try to contact the Listing Agent at the numbers listed in MRIS. When that fails, contact the Listing Agent’s firm to determine if there are alternative means of contacting the agent (other telephone numbers, email, fax machines, etc.). Also try to determine if another agent in the office is covering for the Listing Agent (this frequently occurs when the agent goes out of town). If that does not work, then contact the Listing Agent’s broker or sales manager, or have your broker make one of those broker-to-broker telephone calls that tend to resolve these situations.

There do not appear to be any exceptions in the rules that would allow the Buyer Agent to ‘go behind the sign.’ While this answer is not the one most Buyer Agents prefer, these rules must stand until there is a Standard of Practice requiring that agents return phone calls.
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