Looking at real estate, it’s worth examining the relationship between how brokers and salespeople disclose their obligations and how our government has responded to the Covid-19 Virus?
There are six things that all Brokers, Associate Brokers, and salespersons must be aware of as fiduciary duties when dealing with sellers, investors, purchasers, renters and lessees of residential and commercial properties. They are the following: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account (shorter and abbreviated version=CCLOAD). How many in our industry follow these legal rules and regulations is probably far and few between and many more that should be but don’t. I would be very suspect about anyone disagreeing with my belief.
After 38 years of being in the industry (26 as a broker and agent and 12 as an investor), I have personally experienced and seen how many, many agents handle their client sellers and customer buyers. Many times they become so attached to their buyers that as sellers or brokers agent they forget who their obligation and loyalty are to! Yes, sometimes we lose track of this because we might be around our customers more than the sellers, but it doesn’t matter, because you were hired by one person, the seller. Yes, there are exceptions as to when you are a dual agent, where you do not have those six exclusive obligations to either seller or buyer.
My feeling, however, is that if you are upfront and candid with both parties, then it becomes less of an issue. It’s really about the transaction and having both parties come to an amicable agreement on price, terms, and conditions (transaction agency is the law and practiced in Texas and other states). I have done numerous transactions this way and have never had any issues that I could not handle or negotiate.
The reason that many don’t choose this path of agency is that it is either truly misunderstood and they don’t know how to perform it properly or agents choose the path of least resistance while at the same time still losing sight of the fact of who they legally represent.
Now let’s take our government’s handling of the coronavirus in relation to our disclosure rules in real estate. Was our government candidly transparent and did they have a duty to account to all of us all information and factors within the scope of how to properly and safely deal with the coronavirus? Not really and the response has been very poorly executed. As more and more of our citizens got sick and died, where was their undivided loyalty to us (make believe we were a seller) or to some other government entities? And you know who I am talking about.
Yes, there certainly was confidentiality among themselves amid their public position that this virus would just pass and not to worry until it became extremely apparent how treacherous and deadly it was and had become to our country. The virus has already ensnared more than 25,000 New Yorkers and people in other states like California and many more. It was clear that it wasn’t going anywhere anytime soon.
Would we as brokers and agents withhold information from our clients who we represent? Probably not but those who are still not disclosing correctly are still breaking the law and still doing it anyway. It’s the same as all those spring break beach goers and the fact that the governor of Florida waited way too long to close down the beaches to minimize the infection rate that was escalating. Although the action was finally taken to close the beaches, the state’s fiduciary duties to the public were so poorly executed in this worst of times.
The last two fiduciary duties are obedience and loyalty that one has to their clients. Was our government obedient and loyal to us when they should have been instead of being Monday morning quarterbacks, in one of the most critically, poorly prepared and damaging events in our history, causing devastation to the health of our country’s people, economy and financials? Thank god, they did finally wake up, but it was too little too late for those who were infected and passed it on to those who got severely sick and those who died.
Our economy, businesses, and financials will recover after the pending recession, but we are not out of the woods by any stretch of one’s imagination and have a considerable way to go. But what do you say to those families and individuals who lost loved ones who suffered and are no longer with us and those who lost jobs, income and wealth? You can decide and come to your own answers and conclusions to my question.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). Just email or snail mail (regular mail) him with your ideas on future columns with your name, email and cell number and he will call or email you back. For a consultation, he can be reached by cell: (516) 647-4289 or by email: Phil@TurnKeyRealEstate.Com to answer any of your questions, concerns or column suggestions and ideas.