Realtor® Legal Tip – Limited agency / principal in the transaction
January 29, 2019
Author: Curtis Bullock
Suppose you are the broker and you are a manager of an LLC that owns real estate. You enter into a listing agreement with the LLC to sell the property. The LLC enters into a REPC with a buyer. Do you have to disclose to the buyer what your interest is in the LLC? Could you represent the buyer?
The Utah Division of Real Estate has recently seen more complaints related to limited agency especially when the agent is acting as a buyer or seller in the same transaction.
What does the law say? Utah law first requires that if you are a principal in the transaction that you disclose it to the other side in writing. Second, Utah law prohibits a licensed agent from acting as a limited agent in a transaction where the agent is a principal (i.e., buyer or seller), or is affiliated with an LLC or another entity that is buying or selling real estate.
So be sure to: (1) disclose to the other party if you are a principal in the transaction (buyer or seller or have an ownership interest in an entity that is the buyer or seller), and (2) don’t act as a limited agent in any transaction where you are buying or selling yourself, or you have an ownership interest in an LLC or other entity that is buying or selling real estate.
See Utah Admin Rule 162-2f-401b(15).