Key Takeaways
- Maryland requires written agency disclosure at the first scheduled face-to-face meeting
- Maryland recognizes seller's agency, buyer's agency, dual agency, and intra-company agency
- A written brokerage agreement is required to establish a client relationship
- The Understanding Whom Real Estate Agents Represent form is required in all residential transactions
- Licensees must treat all parties honestly and fairly regardless of representation
Maryland Agency Relationships
Maryland real estate agency law is governed by the Maryland Real Estate Brokers Act and MREC regulations requiring specific disclosures at the beginning of the relationship.
Key Definitions
| Term | Definition |
|---|---|
| Client | Party who has entered into a written brokerage agreement with a licensee |
| Customer | Party not represented by the licensee |
| Seller's Agent | Licensee representing the seller/landlord |
| Buyer's Agent | Licensee representing the buyer/tenant |
| Dual Agent | Licensee representing both parties with written consent |
| Intra-company Agent | Different agents in same company representing each party |
Creating Agency Relationships
In Maryland, a written brokerage agreement is required to establish a client relationship. Key requirements:
- Must be in writing and signed by both licensee and client
- Must specify the type of representation
- Must disclose the licensee's duties and obligations
- Must describe compensation arrangements
- Must include the expiration date
Exam Tip: Without a written brokerage agreement, a person is a customer, not a client, and is owed only limited duties.
Client vs. Customer
Client Relationship
- Created by written brokerage agreement
- Licensee owes fiduciary duties
- Licensee represents the client's interests
- Confidential information is protected
Customer Relationship
- No written brokerage agreement
- Licensee performs limited services
- No fiduciary duties owed (except honesty)
- Must be treated fairly and honestly
Required Disclosures
Understanding Whom Real Estate Agents Represent
Maryland requires the "Understanding Whom Real Estate Agents Represent" disclosure form at the first scheduled face-to-face meeting to discuss a specific property.
First scheduled face-to-face meeting means:
- A prearranged meeting (not chance encounter)
- To discuss a specific property or buyer's needs
- Can include virtual meetings in some cases
What is NOT a Required Disclosure Trigger
- Casual conversations
- Open house attendance (although Open House Disclosure Sign is required)
- General inquiry calls
- Chance meetings
Open House Disclosure Sign
MREC requires an Open House Disclosure Sign that:
- May not be altered
- Must be displayed in at least 8.5" x 11" size
- Must be in color
- Must remain on Maryland Real Estate Commission letterhead
Types of Agency Relationships
Seller's Agent (Listing Agent)
A seller's agent represents the seller and owes full fiduciary duties:
| Duty | Description |
|---|---|
| Loyalty | Put seller's interests first |
| Obedience | Follow lawful instructions |
| Disclosure | Reveal all material information to seller |
| Confidentiality | Protect seller's private information |
| Accounting | Handle funds properly |
| Reasonable Care | Act competently and diligently |
Buyer's Agent
A buyer's agent represents the buyer with the same fiduciary duties:
- Loyalty to the buyer
- Disclose material information to buyer
- Keep buyer's negotiating position confidential
- Help buyer obtain the best price and terms
Duties Owed to All Parties
Regardless of representation, licensees owe ALL parties:
- Honest dealing - No fraud or misrepresentation
- Disclosure of material facts about property condition
- Timely presentation of all written offers
- Fair treatment in all dealings
When must a Maryland licensee provide the "Understanding Whom Real Estate Agents Represent" disclosure form?
In Maryland, what is required to establish a client relationship?