North Carolina Administrative Code › Title 21 - OCCUPATIONAL LICENSING BOARDS AND COMMISSIONS › Chapter 58 - REAL ESTATE COMMISSION › Subchapter A - REAL ESTATE BROKERS › Section .0100 - GENERAL BROKERAGE › Section 58A .0104 - AGENCY AGREEMENTS AND DISCLOSURE

Current through Register Vol. 39, No. 2, July 15, 2024
(a) Every
				  agreement for brokerage services in a real estate transaction and every
				  agreement for services connected with the management of a property owners
				  association shall be in writing and signed by the parties thereto. Every
				  agreement for brokerage services between a broker and an owner of the property
				  to be the subject of a transaction shall be in writing and signed by the
				  parties at the time of its formation. Every agreement for brokerage services
				  between a broker and a buyer or tenant shall be express and shall be in writing
				  and signed by the parties thereto not later than the time one of the parties
				  makes an offer to purchase, sell, rent, lease, or exchange real estate to
				  another. However, every agreement between a broker and a buyer or tenant that
				  seeks to bind the buyer or tenant for a period of time or to restrict the
				  buyer's or tenant's right to work with other agents or without an agent shall
				  be in writing and signed by the parties thereto from its formation. A broker
				  shall not continue to represent a buyer or tenant without a written, signed
				  agreement when such agreement is required by this Rule. Every written agreement
				  for brokerage services of any kind in a real estate transaction shall be for a
				  definite period of time, shall include the broker's license number, and shall
				  provide for its termination without prior notice at the expiration of that
				  period, except that an agency agreement between a landlord and broker to
				  procure tenants or receive rents for the landlord's property may allow for
				  automatic renewal so long as the landlord may terminate with notice at the end
				  of any contract period and any subsequent renewals. Every written agreement for
				  brokerage services that includes a penalty for early termination shall set
				  forth such a provision in a clear and conspicuous manner that shall distinguish
				  it from other provisions of the agreement. For the purposes of this Rule, an
				  agreement between brokers to cooperate or share compensation shall not be
				  considered an agreement for brokerage services and, except as required by Rule
				  .1807 of this Subchapter, need not be memorialized in writing.
(b) Every listing agreement, written buyer
				  agency agreement, or other written agreement for brokerage services in a real
				  estate transaction shall contain the following provision: "The broker shall
				  conduct all brokerage activities in regard to this agreement without respect to
				  the race, color, religion, sex, national origin, handicap, or familial status
				  of any party or prospective party." The provision shall be set forth in a clear
				  and conspicuous manner that shall distinguish it from other provisions of the
				  agreement. For the purposes of this Rule, the term, "familial status" shall be
				  defined as it is in
				  G.S.
				  41A-3(1b).
(c) In every real estate sales transaction, a
				  broker shall, at first substantial contact with a prospective buyer or seller,
				  provide the prospective buyer or seller with a copy of the publication "Working
				  with Real Estate Agents," set forth the broker's name and license number
				  thereon, review the publication with the buyer or seller, and determine whether
				  the agent will act as the agent of the buyer or seller in the transaction. If
				  the first substantial contact with a prospective buyer or seller occurs by
				  telephone or other electronic means of communication where it is not practical
				  to provide the "Working with Real Estate Agents" publication, the broker shall
				  at the earliest opportunity thereafter, but in no event later than three days
				  from the date of first substantial contact, mail or otherwise transmit a copy
				  of the publication to the prospective buyer or seller and review it with him or
				  her at the earliest practicable opportunity thereafter. For the purposes of
				  this Rule, "first substantial contact" shall include contacts between a broker
				  and a consumer where the consumer or broker begins to act as though an agency
				  relationship exists and the consumer begins to disclose to the broker personal
				  or confidential information. The "Working with Real Estate Agents" publication
				  may be obtained on the Commission's website at www.ncrec.gov or upon request to
				  the Commission.
(d) A real estate
				  broker representing one party in a transaction shall not undertake to represent
				  another party in the transaction without the written authority of each party.
				  The written authority shall be obtained upon the formation of the relationship
				  except when a buyer or tenant is represented by a broker without a written
				  agreement in conformity with the requirements of Paragraph (a) of this Rule.
				  Under such circumstances, the written authority for dual agency shall be
				  reduced to writing not later than the time that one of the parties represented
				  by the broker makes an offer to purchase, sell, rent, lease, or exchange real
				  estate to another party.
(e) In
				  every real estate sales transaction, a broker working directly with a
				  prospective buyer as a seller's agent or subagent shall disclose in writing to
				  the prospective buyer at the first substantial contact with the prospective
				  buyer that the broker represents the interests of the seller. The written
				  disclosure shall include the broker's license number. If the first substantial
				  contact occurs by telephone or by means of other electronic communication where
				  it is not practical to provide written disclosure, the broker shall immediately
				  disclose by similar means whom he or she represents and shall immediately mail
				  or otherwise transmit a copy of the written disclosure to the buyer. In no
				  event shall the broker mail or transmit a copy of the written disclosure to the
				  buyer later than three days from the date of first substantial contact with the
				  buyer.
(f) In every real estate
				  sales transaction, a broker representing a buyer shall, at the initial contact
				  with the seller or seller's agent, disclose to the seller or seller's agent
				  that the broker represents the buyer's interests. In addition, in every real
				  estate sales transaction other than auctions, the broker shall, no later than
				  the time of delivery of an offer to the seller or seller's agent, provide the
				  seller or seller's agent with a written confirmation disclosing that he or she
				  represents the interests of the buyer. The written confirmation may be made in
				  the buyer's offer to purchase and shall include the broker's license
				  number.
(g) The provisions of
				  Paragraphs (c), (d) and (e) of this Rule do not apply to real estate brokers
				  representing sellers in auction sales transactions.
(h) A broker representing a buyer in an
				  auction sale transaction shall, no later than the time of execution of a
				  written agreement memorializing the buyer's contract to purchase, provide the
				  seller or seller's agent with a written confirmation disclosing that he or she
				  represents the interests of the buyer. The written confirmation may be made in
				  the written agreement.
(i) A firm
				  that represents more than one party in the same real estate transaction is a
				  dual agent and, through the brokers associated with the firm, shall disclose
				  its dual agency to the parties.
(j)
				  When a firm represents both the buyer and seller in the same real estate
				  transaction, the firm may, with the prior express approval of its buyer and
				  seller clients, designate one or more individual brokers associated with the
				  firm to represent only the interests of the seller and one or more other
				  individual brokers associated with the firm to represent only the interests of
				  the buyer in the transaction. The authority for designated agency shall be
				  reduced to writing not later than the time that the parties are required to
				  reduce their dual agency agreement to writing in accordance with Paragraph (d)
				  of this Rule. An individual broker shall not be so designated and shall not
				  undertake to represent only the interests of one party if the broker has
				  actually received confidential information concerning the other party in
				  connection with the transaction. A broker-in-charge shall not act as a
				  designated broker for a party in a real estate sales transaction when a
				  provisional broker under his or her supervision will act as a designated broker
				  for another party with a competing interest.
(k) When a firm acting as a dual agent
				  designates an individual broker to represent the seller, the broker so
				  designated shall represent only the interest of the seller and shall not,
				  without the seller's permission, disclose to the buyer or a broker designated
				  to represent the buyer:
(1) that the seller
				  may agree to a price, terms, or any conditions of sale other than those
				  established by the seller;
(2) the
				  seller's motivation for engaging in the transaction unless disclosure is
				  otherwise required by statute or rule; and
(3) any information about the seller that the
				  seller has identified as confidential unless disclosure of the information is
				  otherwise required by statute or rule.