Vermont Real Estate Information Network

By David Raphael
VREIN President

The Vermont Real Estate Commission (VREC) recently acted on a Declaratory Ruling request regarding Consumer Information Disclosures (CID) and how it affects your responsibilities as a licensee.

The bottom line for all agents – always provide the CID, no exceptions. Have a written policy outlining the consistent delivery and filing of the CID at first contact. Have the agency discussion with consumers and educate them about their choices when working with a REALTOR®. Part of the VREC’s role is to protect consumers. Your REALTOR® Code of Ethics also exists to provide a compass for dealing with each other, clients and customers, and the public.

"What does it have to do with me?"

This is about you, the Consumer Information Disclosure (CID) and your responsibilities as a licensee under the State of Vermont (oh, and let’s throw some code of ethics in for good measure!). 

There have been months of discussions around the state amongst brokers and agents concerning your MLS displays. It’s been a hot topic at VREIN board meetings and I have taken numerous calls from agents and local boards awaiting the outcome of the VT Real Estate Commission’s (VREC) response to VREIN’s request for declaratory ruling. With the decision released after the August VREC meeting, this issue can finally be closed. Before we leave it, it’s important to recap the critical determining factor that influenced the ruling, the Consumer Information Disclosure.

Background
For those not tired by the sequence of events, here is a small recap of the last six months. At VREC meetings earlier this year, general questions began being raised about the MLS listings we provide as agents to customers and clients. These take the form of items like customer displays, prospect cart compilations, CMA displays, and one liners. VREIN made a formal request to the commission to determine the following:

Do compilations or lists containing information about properties listed with a Multiple Listing Service (MLS) that are provided to specific clients or customers by cooperating brokers in an MLS in response to the client’s or customer’s requirements which are not circulated or made available to the general public constitute “Advertising” by the cooperating brokers within the meaning and intent of the VREC Rules? (source VREIN Declaratory Ruling Request, 4-2009)

The belief of your leadership was that non-public displays or printouts, provided to a customer or client, do not meet the definition of advertising. Note, it has already been made clear that your public websites displaying another brokerage’s listings MUST indicate the agent’s name and brokerage firm (See VREC Rule 4.12 (d) ).

The Ruling
After much testimony and exchanging of information, the VREC made the following ruling.

A unique, non-public MLS compilation of properties is not advertising for the purposes of Rule 4.12 under the following conditions:

1. The compilation is generated at the request of a client or customer; who
2. Received the mandatory consumer disclosure form outlining the relationship between the licensee and the client or customer; and
3. 3he list is generated for the specific client or customer only.

The CID
Point two is critical. The VREC expects that in every instance, you have provided to the consumer the Vermont Mandatory Consumer Disclosure form (CID) as required in Rule 4.6. That rule states:

• (a) A brokerage firm, and its agents, shall provide a written consumer disclosure form that includes the content established by the Commission to any unrepresented person with whom an agent of the brokerage firm has substantial contact. The disclosure shall occur at the first reasonable opportunity, and it must occur before entering into a service agreement or before showing a property.
• (b) Before the disclosure form is provided, an agent shall give an oral disclosure informing the person that there is no confidentiality between the agent and the person until there is a signed brokerage service agreement.

While opinions may differ on what constitutes “substantial contact” or “first reasonable opportunity,” I think we could garner general agreement that if you are providing an MLS compilation of listings that match a customer or client’s requirements, you have had substantial contact. This means as a licensee, you and your firm need to have a policy for delivering the CID and maintaining a record that you have. This means having the discussion about agency and about lack of confidentiality when you are first beginning conversations with a consumer. This applies to everything from someone calling on one of your signs, someone responding from your website, someone stopping into your office, to someone you run into at the grocery store who asks about a home you just listed. Err on the side of caution when making the disclosure: ALWAYS provide it.

Your Code of Ethics
Let’s not forget our REALTOR® Code of Ethics which also requires us to talk about agency and ask questions to determine if a consumer is already represented and to provide written confirmation of agency disclosure.

Standard of Practice 16-9: REALTORS®, prior to entering into a representation agreement, have an affirmative obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service.

Standard of Practice 16-1: On unlisted property, REALTORS® acting as buyer/tenant representatives or brokers shall disclose that relationship to the seller/landlord at first contact for that buyer/tenant and shall provide written confirmation of such disclosure to the seller/landlord not later than execution of any purchase or lease agreement.

Standard of Practice 16-12: REALTORS®, acting as representatives or brokers of sellers/landlords or as subagents of listing brokers, shall disclose that relationship to buyers/tenants as soon as practicable and shall provide written confirmation of such disclosure to buyers/tenants not later than execution of any purchase or lease agreement.

Summary
Simply put, provide the CID, always, no exceptions. Have a written policy outlining the consistent delivery and filing of the CID at first contact. Have the agency discussion with consumers and educate them about their choices when working with a Realtor®. Part of the VREC’s role is to protect consumers. Your Realtor® Code of Ethics also exists to provide a compass for dealing with each other, clients and customers, and the public.

Resources
VREC Rules
REALTOR® Code of Ethics
Declaratory Ruling  (complete ruling)