Tell Me More: Please read the questions and answers below for additional information about when the law goes into effect, seller disclosure requirements, and dual and designated agency.
When does the Real Estate Consumer Protection Enhancement Act go into effect?
The law goes into effect on Aug. 1 and the National Association of Realtors® mandatory practice changes must be implemented by Aug. 17.
The Real Estate Consumer Protection Enhancement Act requires all sellers (including banks, estate administrators, and other entities) to disclose, on the Seller’s Property Condition Disclosure Statement, any known condition of the property to the best of their knowledge. While certain disclosures (ex. flood risk) must be disclosed beyond actual knowledge, most of the Seller Property Condition Disclosure Statement relies upon a seller’s actual knowledge. If a seller doesn’t have actual knowledge, the seller can answer ‘unknown.’ Then it is up to the buyer to gauge whether to rely upon or trust whether the seller’s answers are complete/truthful. A seller’s refusal to make the proper disclosures is a violation of the law.
Is Disclosed Dual Agency still allowed?
Yes. Disclosed Dual Agency is still allowed under the new law, which allows an agent to work with both the seller and the buyer with limited fiduciary duties to both sides. The law also introduces an additional form of agency, designated agency, which enables a brokerage to appoint different agents within the brokerage to represent both the seller and the buyer with full fiduciary duties at the clients' request.
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