Dual agency bill OK'd by legislature

April 10, 1994|By Ellen James Martin | Ellen James Martin,Sun Staff Writer

A bill that would set guidelines for real estate brokers who want to represent both a buyer and seller in the same transaction was approved last week by the Maryland General Assembly.

Gov. William Donald Schaefer was expected to sign the bill, which take effect Jan. 1, 1995.

Passage of the bill marks the end of a two-year struggle by the Maryland Association of Realtors, said Arthur Davis III, a Baltimore real estate executive and the group's president.

"We're very happy that the bill has passed because it now makes clear what agents' obligations will be to both buyer and seller at the first scheduled appointment with the buyer," Mr. Davis said.

The legislation allows a real estate company to represent both buyer and seller in the same transaction. Such arrangements, known as "dual agency," already exist, and Maryland's attorney general has ruled that they are legal under certain conditions.

The new law would explicitly permit companies to act as "dual agents" if they told their clients they were doing so early in the process and their customers had no objections.

Opponents of the bill, including some real estate executives, say dual agency is a conflict of interest because a broker gives his allegiance to both parties in a home sale. Some liken it to a law firm representing both sides in a trial.

Among other things, the law would:

* Require brokers that are dual agents to assign different agents to the buyer and seller.

* Forbid the broker from disclosing to the seller that the buyer is willing to pay more, or disclosing to the buyer that the seller is willing to take less.

* Require agents to disclose to buyers and sellers their rights about dual agency, including the right not to accept the arrangement.

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