Don’t Forget About the New York State Agency Disclosure Form

Jul 16, 2020

By Doreen Spagnuolo, Corporate Counsel and Patrick Fife, Associate Corporate Counsel, Long Island Board of REALTORS®

In addition to licensees focusing their attention on the newly required New York State Housing Discrimination Disclosure Form and NYSAR’s optional COVID-19 Disclosure Form, it is important for licensees to also not forget their obligations with respect to the required New York State Disclosure Form for Buyer and Seller (Agency Disclosure Form). Below are some answers to commonly asked questions about the Agency Disclosure Form and Agency in general.

Q: When must a licensee present the New York State Disclosure Form for Buyer and Seller (Agency Disclosure Form)?

A:

• A listing agent must provide the Agency Disclosure Form to a seller or landlord prior to entering into a listing agreement with the seller or landlord.

• A buyer’s agent or tenant’s agent must provide the Agency Disclosure Form to the buyer or tenant prior to entering into an agreement to act as the buyer’s agent or tenant’s agent.

• A seller’s agent or landlord’s agent must provide the Agency Disclosure Form to a buyer, buyer’s agent, tenant or tenant’s agent at the time of the first substantive contact with the buyer or tenant.

• A buyer’s agent or tenant’s agent must provide the Agency Disclosure Form to the seller, seller’s agent, landlord or landlord’s agent at the time of the first substantive contact with the seller or landlord.

Q: What is “first substantive contact”?

A: The New York State Department of State (DOS) has stated that any communication between a broker/ salesperson and buyer wherein the price, condition of the house, or taxes are part of the discussion would seem to trigger the first substantive contact concept.

DOS has also stated that a broker does not have substantive contact with a party when that party is in the presence of his/her own broker (or agent). This is because in such situations any considerable communications involving matters of major or practical importance will take place between the brokers. But in those situations, the broker must still disclose their agency status.

Q: Is the Agency Disclosure Form required in commercial transactions?

A: The Agency Disclosure Form is required in all residential transactions, including coops and condos. Although it is not required in commercial transactions, you may want to use the disclosure as a piece of evidence if there is a dispute.

Q: What if a party refuses to sign the Agency Disclosure Form?

A: If any party refuses to sign the Agency Disclosure Form, the broker/agent must sign either an affidavit (which must be notarized) or an affirmation, which is a sworn statement that does not need to be notarized and can be found on LIBOR Documents on Demand (Declaration by Real Estate Licensee). This Declaration states that the broker/agent gave the disclosure to the party, but the party refused to sign it.

Q: If a broker/agent sells their listing to a buyer who came into an open house, is that broker/agent a dual agent?

A: No, you are not a dual agent since you only have one client, the seller. The buyer is only your customer. If, however, you entered into a buyer agency agreement with the buyer, you would have two clients (the seller and buyer) and dual agency would exist.

Q: If another agent in my office is the listing agent for a specific property, can I be a broker’s agent?

A: No. Since the listing is that of the broker, and the broker is the agent of the seller, all agents whose licenses are held by that broker (whether the listing agent or not) are always going to be a seller’s agent. A licensee acting as a broker’s agent can never be in the same brokerage as the listing itself. A broker’s agent must always be from another broker’s office.