§ 40-57-370 — Duty of licensee to provide disclosure of brokerage relationships; exceptions.

(A) A licensee shall provide at the first practical opportunity to all potential buyers and sellers of real estate with whom the licensee has substantive contact: (1) a meaningful explanation of brokerage relationships in real estate transactions that are offered by that real estate brokerage firm, including an explanation of customer and client services; (2) Disclosure of Brokerage Relationships form prescribed by the commission. (B) An "Acknowledgement of Receipt of the Disclosure of Brokerage Relationships" form must be included in an agency agreement and in a sales contract. In addition, each sales contract must require the buyer and the seller to acknowledge whether they received customer or client service in that real estate transaction. (C) At the time of first substantive contact, it is presumed that the potential buyer or seller is to be a customer of the real estate brokerage firm and that the real estate brokerage firm will be acting as a transaction broker as defined by this chapter and that the real estate brokerage firm shall offer services to a customer as defined by Section 40-57-350(L) only until the potential buyer or seller signs an agency representation agreement. (D) If first substantive contact occurs over the telephone or other electronic means, including the Internet and electronic mail, an "Acknowledgement of Receipt of the Disclosure of Brokerage Relationships" form may be sent by electronic means, including the Internet and electronic mail. (E) For all real estate transactions, no agency relationship between a buyer, seller, landlord, or tenant and a real estate brokerage firm exists unless the buyer, seller, landlord, or tenant and the brokerage company agree, in writing, to the agency relationship. No type of agency relationship may be assumed by a buyer, seller, landlord, tenant, or licensee or created orally or by implication. A real estate brokerage firm may not be considered to have an agency relationship with a party or have agency obligations to a party but is responsible only for exercising reasonable care in the discharge of the real estate brokerage firm's specified duties, as provided in this chapter, and, in the case of a client, as specified in the agency agreement. (F) The payment or promise of payment of compensation to a real estate brokerage firm by a seller, buyer, landlord, or tenant does not determine whether an agency relationship has been created between a real estate licensee and a seller, buyer, landlord, or tenant. (G) The brokerage relationship disclosure requirements of this section do not apply if the: (1) transaction is regarding the rental or lease of property; or (2) communication from the licensee is a solicitation of business.

Legislative History

HISTORY: 1997 Act No. 24, SECTION 1; 2004 Act No. 218, SECTION 18; formerly 1976 Code SECTION 40-57-139; 2016 Act No. 170 (S.1013), SECTION 1, eff January 1, 2017; 2024 Act No. 204 (H.4754), SECTION 3, eff May 21, 2024. Effect of Amendment 2016 Act No. 170, SECTION 1, rewrote the section. 2024 Act No. 204, SECTION 3, in (E), in the first sentence, deleted "and its associated licensees" following "brokerage firm" and "brokerage company".