37-51-314. Relationship disclosure requirements. (1) A broker or salesperson shall disclose the existence and nature of relevant agency or other relationships to the parties to a real estate transaction as provided in this section.
     (2) A seller agent shall make the required relationship disclosures:
     (a) to the seller at the time the listing agreement is executed or, if the seller agent is acting as a seller subagent, at the time negotiations commence; and
     (b) to the buyer or buyer agent at the time negotiations commence.
     (3) A buyer agent shall make the required relationship disclosures:
     (a) to the buyer at the time the buyer broker agreement is executed or, if the buyer agent is acting as a buyer subagent, at the time negotiations commence; and
     (b) to the seller or seller agent at the time negotiations commence.
     (4) A statutory broker shall make the required relationship disclosure to the buyer and seller at the time negotiations commence.
     (5) A buyer agent or seller agent who subsequently becomes a dual agent shall disclose the relationship to the buyer and seller and receive their consent prior to the time or at the time that the dual agency arises.
     (6) A disclosure required by this section must be signed and dated by the party to whom the disclosure is directed and by the broker or salesperson. A disclosure must contain substantially the following information:
     (a) Seller agent disclosure to the seller: "(Name of seller agent) will be representing you as your agent or subagent in the sale of your property located at (address of property). Your seller agent is obligated to you as enumerated below. If your seller agent is also representing a buyer who becomes interested in your property, a dual agency may be created. In a dual agency relationship, the seller agent is obligated to the buyer in the same way as to you. This conflict will prohibit the seller agent from advocating exclusively on your behalf or the buyer's behalf and may limit the level of representation you receive. If the potential for a dual agency arises, the seller agent shall provide you with a dual agent disclosure. A seller agent cannot act as a dual agent without your consent and that of the buyer. This consent is given by you and the buyer signing the dual agent disclosure. If you or the buyer declines to give this consent, your opportunity to sell your property to that buyer may be lost.
     Your seller agent is obligated to you as follows:
     (1) to act solely in the best interests of the seller to the exclusion of all other interests, including those of the seller agent;
     (2) to obey promptly and efficiently all lawful instructions of the seller;
     (3) to disclose to the seller all relevant and material information that concerns the real estate transaction and that is known by the seller agent and not known by the seller, unless the information is subject to confidentiality arising from a prior or existing agency relationship;
     (4) to safeguard the seller's confidences;
     (5) to exercise reasonable skill, care, and diligence in pursuing the seller's objectives as established in the listing agreement;
     (6) to fully account to the seller for all funds or property of the seller coming into the seller agent's possession;
     (7) to comply with all applicable federal and state laws, rules, and regulations; and
     (8) to carry out the terms of the listing agreement."
     (b) Seller agent disclosure to the buyer: "(Name of seller agent) is the agent of the seller with respect to the seller's property located at (address of property). Although the seller agent is primarily obligated to the seller, the seller agent is obligated to you as specified below.
     A seller agent is obligated to a buyer as follows:
     (1) to disclose to a buyer any adverse material facts that concern the property and that are known to the seller agent;
     (2) to deal in good faith with the buyer; and
     (3) to comply with all applicable federal and state laws, rules, and regulations.
     "Adverse material fact" means a fact that should be recognized by a broker as being of enough significance as to affect a person's decision to enter into a contract to buy or sell real property and may be a fact that materially affects the value or structural integrity or presents a documented health risk to occupants of the property. The term may not include the fact that an occupant of the property has or has had a communicable disease or that the property was the site of a suicide or felony."
     (c) Buyer agent disclosure to the buyer: "(Name of buyer agent) will be representing you as your agent or subagent in the purchase of real property of the nature described in the buyer broker agreement. Your buyer agent is obligated to you as enumerated below. If your buyer agent is also representing a seller of property that you become interested in, a dual agency may be created. In a dual agency relationship, the buyer agent is obligated to the seller in the same way as to you. This conflict will prohibit the buyer agent from advocating exclusively on your behalf or on the seller's behalf and may limit the level of representation you receive. If the potential for a dual agency arises, the buyer agent shall provide you with a dual agent disclosure. A buyer agent cannot act as a dual agent without your consent and that of the seller. This consent is given by you and the seller signing the dual agent disclosure. If you or the seller declines to give this consent, your opportunity to acquire the seller's property may be lost.
     Your buyer agent is obligated to you as follows:
     (1) to act solely in the best interests of the buyer to the exclusion of all other interests, including those of the buyer agent;
     (2) to obey promptly and efficiently all lawful instructions of the buyer;
     (3) to disclose to the buyer all relevant and material information that concerns the real estate transaction and that is known by the buyer agent and not known by the buyer, unless the information is subject to confidentiality arising from a prior or existing agency relationship;
     (4) to safeguard the buyer's confidences;
     (5) to exercise reasonable skill, care, and diligence in pursuing the buyer's objectives as established in the buyer broker agreement;
     (6) to fully account to the buyer for all funds or property of the buyer coming into the buyer agent's possession;
     (7) to comply with all applicable federal and state laws, rules, and regulations; and
     (8) to carry out the terms of the buyer broker agreement."
     (d) Buyer agent disclosure to the seller: "(Name of buyer agent) is representing the buyer with respect to the seller's property located at (address of property). Although the buyer agent is primarily obligated to the buyer, the buyer agent is obligated to you as specified below.
     A buyer agent is obligated to a seller as follows:
     (1) to disclose to a seller any adverse material facts that concern the ability of the buyer to perform on any purchase offer and that are known to the buyer agent;
     (2) to deal in good faith with the seller; and
     (3) to comply with all applicable federal and state laws, rules, and regulations.
     "Adverse material fact" means a fact that should be recognized by a broker as being of enough significance as to affect a person's decision to enter into a contract to buy or sell real property and may be a fact that materially affects the buyer's ability or intent to perform the buyer's obligations under a proposed or existing contract."
     (e) Statutory broker disclosure to the buyer and seller: "(Name of statutory broker) will be involved as a statutory broker with respect to the purchase and sale of real property located at (address). A statutory broker is not the agent of the buyer or seller but is only assisting the parties in executing a sale of the property. A statutory broker is obligated to the buyer and seller as specified below.
     A statutory broker is obligated to the parties as follows:
     (1) to disclose to a buyer any adverse material fact that concerns the property and that is known to the statutory broker and not known to the buyer. However, the statutory broker is not required to conduct an independent inspection of the property or to verify any representation made by the seller.
     (2) to disclose to the seller any adverse material fact that concerns the buyer's intent or ability to perform on the purchase offer and that is known to the statutory broker and not known to the seller;
     (3) to exercise reasonable skill, care, and diligence in facilitating the purchase and sale of the property; and
     (4) to comply with all applicable federal and state laws, rules, and regulations.
     "Adverse material fact" means a fact that should be recognized by a broker as being of enough significance as to affect a person's decision to enter into a contract to buy or sell real property. It may be a fact that materially affects the value or structural integrity or presents a documented health risk to occupants of the property, but may not include the fact that an occupant of the property has or has had a communicable disease or that the property was the site of a suicide or felony, or it may be a fact that materially affects the buyer's ability or intent to perform the buyer's obligations under a proposed or existing contract."
     (f) Dual agent disclosure to the buyer and seller: "(Name of dual agent) is the agent of the buyer interested in purchasing the property and of the seller of the property located at (address of property). A dual agent is obligated to the buyer and seller as follows:
     (1) to act solely in the best interests of the buyer and seller to the exclusion of all other interests including the dual agent's;
     (2) to obey promptly and efficiently all lawful instructions of the buyer and seller;
     (3) to disclose to the buyer and seller all relevant and material information that concerns the real estate transaction and that is known by the dual agent and not known by the buyer or seller, unless the information is subject to confidentiality arising from a prior or existing agency relationship;
     (4) to exercise reasonable skill, care, and diligence in pursuing the buyer's and seller's objectives as established in the listing agreement and buyer broker agreement;
     (5) to fully account to the buyer and seller for all funds or property of the buyer and seller coming into the dual agent's possession;
     (6) to comply with all applicable federal and state laws, rules, and regulations;
     (7) to carry out the terms of the buyer broker agreement; and
     (8) to safeguard the buyer's and seller's confidences, subject to the obligation to disclose to a buyer or a seller any adverse material facts that are known to the dual agent, regardless of any confidentiality considerations. The following may not be disclosed without the written consent of the party to whom the information is confidential:
     (a) that the buyer is willing to pay more than the buyer has offered for the property;
     (b) that the seller is willing to accept less than the asking price for the property;
     (c) factors motivating the buyer to buy or the seller to sell; and
     (d) any other information that a party specifically indicates in writing to the dual agent is to be kept confidential and that is not an adverse material fact.
     "Adverse material fact" means a fact that should be recognized by a broker as being of enough significance as to affect a person's decision to enter into a contract to buy or sell real property. It may be a fact that materially affects the value or structural integrity or presents a documented health risk to occupants of the property, but may not include the fact that an occupant of the property has or has had a communicable disease or that the property was the site of a suicide or felony, or it may be a fact that materially affects the buyer's ability or intent to perform the buyer's obligations under a proposed or existing contract.
     Upon signing this disclosure form, the buyer and seller acknowledge that they understand the obligations owed by a dual agent to them and consent to the dual agent representing them as a dual agent."
     (7) A written disclosure that complies with the provisions of this section must be construed as a sufficient disclosure of the relationship between a broker or salesperson and a buyer or seller and must be construed as conclusively establishing the obligations owed by a broker or salesperson to a buyer or seller in a real estate transaction.

     History: En. Sec. 4, Ch. 565, L. 1995.