By Benny L. Kass
Here are some of the questions I have answered on the HotLine Program. It must be understood that the answers are my opinions, and for the information of GCAAR members. I am not providing legal advice, but rather providing only a general statement of law. No lawyer-client relationship is - or will be - established as a result of the material which follows. Readers are encouraged to retain their own counsel for their specific questions.
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The caller said that the client of one of her agents gave them a check for $2,000, and she"neglected" to deposit it within the usual 48 hours after receipt. When she did deposit the check approximately 10 days later, the check "bounced." The broker has been lenient with that client about this because the client lost her job and had taken more than the 40 days allowed to acquire funding. Now, however, the other broker wants the money, and there is none. The caller wants to know what options she has. |
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You are in potential real trouble, not only with the other side but also with a potential violation of DC law. Why does the other broker want the money? Has it been determined that there is a default which would allow the other side to keep the deposit? But in any event, you must either immediately get the money from the buyer or fess up and explain and have the contract terminated. The law in the District of Columbia is very clear. Title 42 (entitled Real Property) section 1704 specifically states that the deposit shall be
(1) Deposited within 7 days in an account in a financial institution located within the District whose deposits are insured either by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, or their successors... |
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The agent represents a buyer who wants to purchase a DC townhouse to use as an office. When the agent went to retrieve the forms for such a purchase, she learned that there is not a commercial form to suit the purchase of a townhouse for commercial purposes. She wants to know "what language" should be included in the residential form to conform it to commercial. |
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First, make sure that the property is zoned commercial. You can find this out by going to the District Zoning Office at 941 North Capital Street. I understand that the zoning map is also on the District's website, but some of us who are not computer literate cannot figure out how to access the site.
Most real estate attorneys have a Model Commercial Purchase and Sales Agreement which was drafted several year ago under the auspices of the DC Bar Association. You might also consider contacting a REALTOR® who specializes in commercial sales for guidance. |
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The caller's Broker is representing a Developer of a condominium project, and the agent is "on-site" at the project. The agent wanted to know whether he could be a Buyer's agent, and if so, whether he needs to explain what that arrangement is and that the Buyer must sign a form. Is the agent able to make an offer to a prospective Buyer of a unit there without having that prospective Buyer sign the agreement? The agent understands that he must explain that he is also representing the Developer. This would be a scenario wherein a prospective Buyer approaches him; the agent would not be a solicitor of sorts. |
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I specifically asked the agent: what's the advantage for you to be a buyer's broker? Do you get a larger commission under those circumstances?
I think the agent would have a serious conflict of interest if he (or the firm with whom he is affiliated) represents both the developer and also the buyer. If warranty problems arise, or there are disputes over contract terms, the agent would be suspect. However, I further advised the agent that should he want to pursue being a buyer broker, YES, he does need to have the prospective buyer sign the buyer broker form -- and he should also get permission from the developer as well as his Broker. |
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The caller was not sure if her inquiry qualifies as a hotline question, but wanted to ask me nonetheless: when is a real estate agent required to tell someone who is interested in buying his own home that he is a real estate agent? |
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The law requires that real estate agents and brokers disclose their position when a contract is entered into. Technically, that means that disclosure does not have to take place until after the potential buyer makes an offer. It the offer is accepted, then there must be written disclosure directly on the contract document.
However, as an ounce of precaution, it would not hurt the real estate professional to disclose as early as possible. This agent happened to work exclusively on commercial properties, so I advised the caller that he disclose that she is a commercial agent, and generally does not get involved with residential properties. |
