NEW Washington state Agency Law resources
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To help you better understand legal pressures on the industry and to comply with new agency law requirements, we’re pleased to provide these New Washington Agency Law Resources. This page is meant to give our members insight into the imminent shifts in Washington's agency law and be prepared to implement the provisions of the new law properly.
Clarifications to NAR's Proposed Settlement and Policy Changes
August 28, 2024
We have received numerous inquiries regarding the National Association of REALTORS® (“NAR”) recently proposed settlement and its impact on the publication of broker compensation in residential real estate transactions. In consultation with CBA's legal counsel, this bulletin aims to clarify the impact of NAR's policy changes and allay any concerns about CBA’s continued practice of allowing sellers to offer compensation to buyer brokers.
In March of 2024, the National Association of REALTORS® (“NAR”) announced a proposed settlement of national class action litigation involving broker compensation in residential real estate transactions. On August 17, 2024, NAR implemented several policy changes in connection with the proposed settlement.
Multiple Listing Services (MLS) included in the settlement are prohibited from publishing compensation offers. CBA brokers who publish a seller’s or landlord’s offer compensation to a buyer’s or tenant’s broker through CBA, however, DO NOT violate the terms of NAR’s proposed settlement. This is because nothing in the proposed settlement agreement requires brokers covered by the settlement, or their sellers/landlords, to refrain from offering compensation to buyers’ or tenants’ brokers through the MLS or otherwise.
The prohibition on offering compensation in the MLS is a condition of MLSs opting into the settlement, not their brokers. As a commercial MLS unaffiliated with NAR, CBA DID NOT opt into the settlement and thus has no such obligation, nor do CBA’s brokers. All CBA brokers may continue to include a seller’s or landlord’s offer of compensation in the listing data submitted to CBA.
DOWNLOAD THE FULL LEGAL BULLETIN
If you have any additional questions, please contact Mary Lyell Larsen at mary@commercialmls.com.
Legal Bulletin: 2024 Agency Law Revision and Forms Changes
Significant revisions to Washington’s law governing real estate brokerage relationships (RCW 18.86, the “Agency Law”) become effective on January 1, 2024. Among other things, the revised Act requires firms to enter written services agreements with buyers as soon as they commence providing real estate brokerage services. (There is an exception to this requirement for buyers who are solely interested in commercial real estate, as defined by Washington law.)
The revisions, which are set forth in Senate Bill 5191, include:
- Requiring real estate firms to enter into a written brokerage services agreement with a buyer as soon as reasonably practical after commencing real estate brokerage services unless the appointed broker performs real estate brokerage services solely for commercial real estate;
- Changing the term “dual agent” to “limited dual agent” to reflect the limited representation that a broker can provide when representing both the buyer and the seller;
- Requiring specific consent by buyers and sellers to an individual broker acting as a limited dual agent;
- Clarifying that a broker owes certain duties in RCW 18.86.030 to all parties in a transaction;
- Requiring disclosure to all parties of any compensation offered to a firm by another party or another real estate firm; and
- Modernizing the “pamphlet” that brokers must provide to consumers explaining real estate brokerage relationships.
These changes in the law necessitated revisions to several CBA forms, as well as the creation of new forms. “The Law of Agency” pamphlet has been replaced by a new pamphlet, “Real Estate Brokerage in Washington.” Samples of the revised forms and pamphlet are available below and will be published for use in Legal Library Pro on January 1, 2024.
The revisions to the Agency Law apply to both purchase and sale transactions and lease transactions. References to buyers and sellers in the Legal Bulletin generally apply to tenants and landlords.
IMPORTANT: It is critical that you fully understand the information in the Legal Bulletin below. Failure to comply with the revisions could result in financial, legal and/or regulatory issues. Please read the ENTIRE LEGAL BULLETIN.
LEGAL BULLETIN: 2024 Agency Law Revision and Forms Changes
A New and Improved Pamphlet
This DRAFT pamphlet provides general information about real estate brokerage and summarizes the laws related to real estate brokerage relationships. It describes a real estate broker's duties to the seller/landlord and buyer/tenant. Detailed and complete
information about real estate brokerage relationships is available in chapter 18.86 RCW. The final version of the Pamphlet will be available for your use on January 1, 2024.
CBA's Real Estate Brokerage in Washington Pamphlet
Between now and January 1, 2024, there will be many educational opportunities, including in-person and online classes offered by CBA and other providers. Brokers are encouraged to take classes early to leave time to consider how their practices and conversations will change when the law changes. DRAFTS of the updated forms (revised services agreements) and the Pamphlet will be available for review and discussion during the classes.
DRAFTS of the replaced, new, and revised forms are available for our members. THESE FORMS ARE NOT FOR USE PRIOR TO JANUARY 1, 2024. The updated forms will be released on January 1, 2024. If you are a CBA Member and would like to review the draft forms, please log in now and return to the Agency Law Resources page in the main navigation.
VIDEO OVERVIEW WITH CBA LEGAL COUNSEL WITH ANDREW MATHEWS | OF COUNSEL, STOEL RIVES
CBA'S AGENCY LAW AND FORMS REVISIONS - JANUARY 2024
UPCOMING CBA LIVE WEBINARS FOR CE CREDIT
Date: Thursday, January 4th
Time: 9:00 a.m. - Noon
Credit: 3 CE Credits
Cost: $39 CBA Members | $69 Non-Members
Location: Live Webinar
The upcoming changes to Washington Agency Law will impact all aspects of how you do business, from agreements with clients to compensation structures. In preparation for the upcoming changes, CBA has revised the Legal Library PRO forms that are affected. We are offering three live webinar classes to help our members understand the revisions to the law and properly execute all required forms.
We encourage all brokers to take one of the classes to understand how their practices and conversations will change when the law changes. DRAFT versions of the updated forms (revised services agreements) and the pamphlet will be available for review and discussion during the classes. Final forms will be available for use on January 1, 2024.
Don't get caught unprepared … You must understand this critical information to conduct your business on a daily basis!
In this class, you'll learn about:
- Critical revisions to Washington’s Agency Law that go into effect on January 1, 2024.
- New revisions to select forms in the CBA Legal Library PRO related to the Agency Law change.
- New forms created in connection with the Agency Law change.
- How to use the new and revised forms so you will be in compliance with the new law and avoid financial, legal and/or regulatory issues.
Our forms have been carefully prepared by the Commercial Brokers Association's legal counsel and are the industry standard for commercial and investment real estate transactions. CBA's forms are designed to provide protection for brokers who use them by ensuring that changes created by modifications in license law or case law are reflected in the forms.
ADDITIONAL RESOURCES
Click on the links below for more information:
RESOURCES FOR BROKERS
- Agency Law Resources Page
- WA REALTORS®
- Chapter 18.86 RCW REAL ESTATE BROKERAGE RELATIONSHIPS
- Washington State Legislature
If you have any questions in the weeks and months ahead, our Executive Team stands ready to assist you personally at (425) 820-3348.
On behalf of the CBA Board of Directors and our staff, we appreciate your continued support and membership of our organization, and we are committed to being a trusted partner and reliable resource to you throughout the course of this transition and beyond.
