There are two types of Agency disclosure forms in New York, one addressing the agent’s fiduciary relationship to the Landlord and Tenant in a rental transaction, and another for their relationship to a Buyer and Seller in sales transactions. Each clearly delineates whose interest the agent serves and, though not binding, defines the terms of the relationship during the real estate transaction. For the purposes of this article, we’re going to focus on the Disclosure Form for Buyer and Seller.
If you’ve never seen this form (and you already live in New York), your real estate agent may not have been doing their job they are required by state law to provide you with an Agency disclosure form at first substantive contact, with the sole purpose of disclosing their interest as it relates to the transaction. Below are the agency relationships specified by a New York State Disclosure Form for Buyer and Seller.
A Buyer’s Agent represents the Buyer’s interests solely by negotiating the purchase of a home at a price and on terms acceptable to the Buyer. A Buyer’s Agent has, without limitation, the following fiduciary duties to the Buyer: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience, and duty to account.
A Seller’s Agent is engaged by a Seller to represent their interests only and does this by securing a Buyer for the Seller’s home at a price and on terms acceptable to the Seller. Similar to a Buyer’s Agent’s relationship to the Buyer, a Seller’s Agent has, without limitation, the following fiduciary duties to the Seller: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience, and duty to account.
A Broker’s Agent cooperates with or is engaged by a Seller’s Agent or Buyer’s Agent to assist in locating a property to sell or buy, but they do not work for the same firm as the Seller’s Agent or Buyer’s Agent. The Buyer and Seller, therefore, do not have a direct relationship with the Broker’s Agent, and cannot provide instructions nor direction (except through their own Agent). This prevents the Buyer and Seller from bearing liability for any acts of the Broker’s Agent.
A Dual Agent may represent both the Buyer and Seller if both parties grant their informed written consent. However, in such a dual agency situation, the Agent is unable to provide the full range of fiduciary duties to the Buyer and Seller due to a conflict of interest. By consenting to the dual agency relationship, both Buyer and Seller waive their right to undivided loyalty.
Dual Agent With Designated Sales Agent
This relationship builds on the terms of a Dual Agent but ultimately does not alter the fact that the acting agents cannot provide the full range of fiduciary duties to the Buyer and Seller. With a Designed Sales Agent, for the purposes of negotiation, the Dual Agent representing both parties may designate an additional Agent to represent the Buyer, and another to represent the Seller. Still, the Designated Sales Agent must explain that, like the Dual Agent under whose supervision they function, they cannot provide undivided loyalty.
The New York State Disclosure Forms are not binding contracts, so please remember: when presented by an agent, you can refuse to sign. However, it is important to acknowledge receipt of the form and understand whose interest the agent represents when negotiating.
Whether you’re buying or selling in New York, contact Byson to be connected with a knowledgeable agent ready to work for your best interests.