Hi Jack, I've just moved that question to the RECALL, Real Estate Consumer Alliance section of #RE2020. Right now, there are few collaborators there, but my hope is that 2018 will be the year a major expose brings down that "legaiize form of fraud," see Doug Miller's post:
From my perspective as a consumer advocate, real estate teams are conflicts of interest within conflicts of interest, and the suggestion that "Teams will eat real estate brokerages" is a timebomb!
@tomwemett Welcome to the RECALL section of RE2020. We're coming up on the 1st anniversary of the event we did with you & Maureen Glasheen via webinar last year in Boston -- Fiduciary Duties in Real Estate: Past, Present & Future.
In the aftermath of the Facebook privacy breach, should we revisit the topic? As real estate companies morph into giant data companies, we need to move beyond talking about fiduciary duties in the real estate transaction to the need for "information fiduciaries." Whether we gather offline again or now, invite you and @jackbarry to listen and record a response to this podcast:
To answer Jack's question: No it should not be banned. Designated agency should be banned but not dual agency. Florida banned dual agency and replaced it with transaction brokerage. The presumption is transaction brokerage with no disclosure that the agent is a transaction broker and that they can't, by law, provide any fiduciary duties. To do that the agent and company must operate as a single agent and provide a single agent disclosure. So buyers and sellers don't know that they aren't dealing with a true agent. The Licensees call themselves agents and actually perform fiduciary duties in violation of the law. Florida ended up with implied agency and undisclosed dual agency as a result.
Dual agency is transparent. The buyer and seller are told that the agents can't provide undivided loyalty, full disclosure or obedience to lawful instruction. While dual agency isn't in the best interest of a buyer or a seller, at least it is transparent and real estate consumers know what they are consenting to. Designated agency is a farce and deception. Designated agents operate as undisclosed dual agents. An Edina type lawsuit is waiting to happen here in Massachusetts. By the way, designated agency has no legal basis in MA as described on the disclosure and practiced. It is clearly undisclosed dual agency, an act of fraud. In order for it to work as purported the real estate licensees would have to work independently of their brokerage. The law is clear on that. No affiliated agent can act independently of the brokerage and are always a representative of the broker. Designated agency is a form of dual agency. The broker is a dual agent and thus all affiliate licensees are as well. Ban designated agency but leave dual agency alone. By the way, law firms sometimes practice dual agency when there is a potential for a conflict of interest. For example when the attorney rrepresents a buyer and a bank. Yes, there are interests that are aligned but they are some that are not. Without dual agency these type of things would not be able to take place. Tom W.
@tomwemett What you wrote makes me cheer, and we’re in the last few days of our annual April Fool’s Day campaign. What’s the best way to:
Translate the language into infographics or videos that consumers can understand;
Help #REStartUps participating in #RE2020 to build on a solid understanding of agency law as it is today, and as will be necessary in future — ie. As Information Fiduciaries or #InfoFiduciaries;
Take legal action: who takes the lead organizing and how / when do you see that happening. Is there a triggering event, growing awareness of hidden costs and consequences, or just individual consumers realizing they’ve been wronged?
Tom that its why we Florida residents refer to this place as FLORIDUH. This is the same gerrymandered collection of legislative morons that gave us 'Stand Your Ground".
But it does not necessarily follow that , just because FL...DUH made transaction brokers the default, that brokers cannot "by law" offer upgrade agent level services. This is a matter of law of contracts and law of agency which certainly allow one to offer BETTER service. In fact, i have employed a Buyer Agent twice to buy and a Seller agent to sell.
However, The Realtor standard agreement fails to disclose to consumers that they have the choice of employing a real agent. That constitutes a fraudulent and and/or deceptive pattern and practice by this trade association in my experienced opinion as former General Counsel of the NY Dept of State.
Moreover, to hold yourselves out as 'an agent' without offering the Loyalty +expertise-
-the QUINTESSENCE of being an AGENT within the consistant meaning of several CENTURIES OF common law is, itself a fraudulent/deceptive pattern and practice of this state and national trade associations that should be referred to the District Attorneys' consumer fraud division, the FTC, the Attorney General.
If Loyalty i is inseparable from the essence off " agent" then dual agent (no matter what contrivance, such as designated agency, they now use) should be banned because it describes a breach of legal and moral duty to a client who you have induced them to repose their reliance upon you and then you abandon in the middle of the deal when they are most vulnerable . As the courts have so eloquently articulated the reasoning behind the rule: when the same party owes conflicting duties to adverse parties in the same transaction , they must be necessarily unfaithful to one , the other or both. One Client At A Time is not a difficult business model to implement; law firms have been doing it for centuries.
it is only hard for people who are not, by nature suited to being fiduciaries or protectors.
Given the opportunities for illicit gain through concealment and collusion, those unsuited to this work of being protectors and fiduciaries should step aside----
Thank you, Maureen. I agree 100%. I have an office in FL in Ft Lauderdale with a fulltime agent. We only practice single agency for buyers only. Pretty sad what goes on in FL, MA and NY.