Distressed Property Law
A message from your industry partners
A new law goes into effect June 12, 2008 that will change the duties required of real estate agents and brokers in many transactions. The Washington REALTORS® and the Northwest Multiple Listing Service recommend that all existing listing agreements, written on the statewide listing agreement form, be rewritten or modified before June 12. Several statewide forms will be revised and new forms will be drafted to meet the requirements of the new law. Agents and brokers must modify the assistance they provide short sale sellers. Agents and brokers will have to choose carefully the services they offer to sellers. During the weeks of May 12 and 19, the Washington REALTORS® and NWMLS will provide broker-only classes statewide teaching compliance with the new law. The importance of brokers attending the class cannot be overstated. The classes will be offered at no charge at locations across the state with the hope that all brokers will attend. Education will also be available for agents through instructional DVDs. The DVDs will be available to brokers, at no cost, for use in educating their agents.The distressed properties law was intended to protect vulnerable property owners from scams to steal the property owner's equity. An unintended consequence of the law makes many agents and brokers a "distressed home consultant." Generally, a distressed home consultant is any agent who offers to assist a seller with the sale of their home if the seller is either 30 days late on their mortgage payment or believes they could become late on mortgage payments in the next four months. Among other things, a distressed home consultant owes fiduciary duties to the seller, must use a special listing agreement and must write the listing agreement in the seller's first language. Listing agents and brokers, selling agents and brokers and even buyers can become distressed home consultants. The Washington REALTORS® carefully monitored the original piece of legislation as proposed by the Attorney General that was intended for consumer protection, however, damaging language was added during a complicated end-game process in the Legislature when there was no opportunity for public comment or time to study the wide-reaching implications on the real estate transaction. The Washington REALTORS® is committed to working with the Washington Attorney General to add language to the law next session minimizing the effect of the law on normal real estate services. Until the law is changed, however, members of the real estate brokerage industry must operate under the law and learn how to provide distressed property owners with lawful service while protecting themselves from liability. More detailed additional information is available from the Washington REALTORS® and NWMLS at: http://www.warealtor.org/distressed_properties.asp or http://www.nwmls.com |
