Agency Relationships In Montana
Unless or until you enter into a written agreement with the Company/Licensee for agency representation, you are considered a “Customer” of the Company/Licensee, and the Company/Licensee will not act as your agent. As a Customer, you should not expect the Company or its licensees to promote your best interest, or to keep your bargaining information confidential.
Customer service does not require a written agreement; therefore, you are not committed to the Company in any way.
Remember, however, that until you enter into a representation agreement with the Company/Licensee, you are considered a customer and the Company/Licensee cannot be your advocate, cannot advise you on price or terms, and cannot keep your confidences.
Once you enter into a written agency agreement you become a client. Your rights under these agreements are explained below.
What agency relationships are available in Montana?
There are four basic relationships available under the Real Estate Licensing Act. Those four relationships are seller agency, buyer agency, dual agency and statutory brokerage. The Real Estate Licensing Act, in particular Montana Code Annotated §37-51-102 and 313, describe how these relationships are created and what each entails.
A seller agency relationship is established in one of two ways, either by a broker entering into a listing agreement with the seller or by a broker accepting an offer of sub-agency from the listing agent.
Similarly, a buyer agency relationship is established in one of two ways, by the broker entering a buyer’s broker agreement (Agreement to Locate Real Property) with the buyer or by the broker accepting an offer of sub-agency from the buyer’s broker. It is worth noting that the statutory definition of buyer agent (Montana Code Annotated §37-51-102(8)) anticipates that a written buyer broker agreement will exist between the buyer broker and the buyer. It is this buyer broker agreement that creates the relationship, not the statutory disclosure.
A dual agency relationship may arise in the situation where the broker is both the agent of the seller (pursuant to a listing or accepted offer of subagency from the listing agent) and the agent of the buyer (pursuant to a buyer’s broker or accepted offer of subagency from the buyer’s broker). As a prerequisite to a dual agency relationship arising, the seller and buyer must review the mandatory disclosure form and consent to the dual representation.
A statutory broker relationship is presumed to exist, unless the broker has entered into a listing with the seller, a buyer’s broker agreement with the buyer or has disclosed a relationship other than that of a statutory broker. The statutory broker relationship was designed as the default relationship. It automatically arises unless a seller agency, buyer agency or dual agency relationship is established in the manner as is described above. Neither the Real Estate Licensing Act, nor any interpretations of it with which I agree, prohibits a statutory broker, from dispensing advice or making recommendations. The only limitation on that is the advice and recommendations have to be given while the statutory broker is exercising reasonable skill, diligence, and care. Thus, a statutory broker does not change his or her relationship with a buyer or seller by giving advice or making recommendations.