Latest Legal Hot Topic: Agency Rules When Dealing with an Unrepresented Buyer
Question: I am representing a seller and I have been contacted by an unrepresented buyer who would like to see the property. I do not practice disclosed dual agency so I will just be representing the seller. Do I need the buyer to sign anything clarifying my role in this deal?
Answer: The answer is found in the Illinois Real Estate License Act (hereinafter “Act”), specifically section 15-35(c) which states:
(c) A licensee shall disclose in writing to a customer that the licensee is not acting as the agent of the customer at a time intended to prevent disclosure of confidential information from a customer to a licensee, but in no event later than the preparation of an offer to purchase or lease real property.
You should provide the unrepresented buyer a notice of no agency since you represent only the seller, which means you are treating the buyer as a customer and not a client. This disclosure will tell the buyer that you do not represent them as their agent. It is important for the buyer to understand this point, so that they do not disclose any information that they would not want you and your seller client to know. You do owe a duty of honesty to the buyer.
You will see that the Illinois REALTORS® sample Notice of No Agency form has a section for signatures with a notation that they are optional. A signature by the unrepresented parties on the Notice is the best way to prove that it was received. However, under the Act, the signatures of the unrepresented parties are NOT required.
How do you prove that you have complied with the Act if the unrepresented parties won’t sign the Notice of No Agency? We would suggest making a contemporaneous notation to your file on how and when you provided the Notice. For example, when you deliver the Notice, make a note to your file copy stating something along the lines of “I gave a copy of this Notice (hand delivered, emailed, mailed, etc.) to NAME OF BUYER(S) on DATE at TIME regarding ADDRESS.”
* Please note that these concepts apply to all real estate brokerage transactions.
About the writer: Prior to joining Illinois REALTORS® in 2022, Victoria (Vicki) Munson was an attorney in private practice focusing on real estate and estate planning matters. She enjoyed assisting buyers and sellers in bringing their transactions to the closing table. Victoria earned her bachelor’s degree from Western Illinois University and her Juris Doctor from The John Marshall Law School.
