Key Takeaways
- Montana recognizes seller agency, buyer agency, disclosed dual agency, and statutory broker relationships under MCA 37-51-314
- Licensees must provide written relationship disclosure at the time the listing or buyer representation agreement is executed
- Dual agency requires written consent from both parties before it can occur
- A statutory broker provides limited services without creating a full agency relationship
- All licensees must disclose known adverse material facts that concern the property under MCA 37-51-313
Montana Agency Relationships
Montana law defines the types of agency relationships that real estate licensees may have with consumers.
Types of Agency Relationships
Seller Agency
A seller's agent represents the seller in a real estate transaction:
| Duty | Description |
|---|---|
| Loyalty | Undivided loyalty to the seller |
| Confidentiality | Keep seller's information confidential |
| Disclosure | Disclose all material facts to seller |
| Obedience | Follow lawful instructions |
| Accounting | Account for all funds |
| Care | Exercise reasonable care and diligence |
Buyer Agency
A buyer's agent represents the buyer in a real estate transaction:
| Duty | Description |
|---|---|
| Loyalty | Undivided loyalty to the buyer |
| Confidentiality | Keep buyer's information confidential |
| Disclosure | Disclose all material facts to buyer |
| Obedience | Follow lawful instructions |
| Accounting | Account for all funds |
| Care | Exercise reasonable care and diligence |
Disclosed Dual Agency
Disclosed dual agency occurs when:
- One licensee represents both buyer and seller in the same transaction, OR
- Two licensees in the same brokerage represent the buyer and seller
Requirements for Dual Agency
| Requirement | Description |
|---|---|
| Written consent | Both parties must consent in writing BEFORE dual agency begins |
| Full disclosure | Full disclosure of the dual relationship |
| Neutrality | Must remain neutral to both parties |
| Confidentiality limits | Cannot disclose price/terms one party will accept without permission |
Warning: Dual agency significantly limits what an agent can do for either party. Full disclosure and written consent are essential.
Statutory Broker Relationship
Montana allows a statutory broker relationship, which provides limited services:
What is a Statutory Broker?
A statutory broker (sometimes called a transaction broker) provides services without creating a full agency relationship:
| Feature | Description |
|---|---|
| No representation | Does not represent either party |
| Limited duties | Provides facilitation services only |
| Disclosure required | Must disclose statutory broker status |
| Honesty | Must be honest with all parties |
When Used
Statutory broker status may be appropriate when:
- Neither party wants full representation
- The licensee cannot or chooses not to represent either party
- Both parties are sophisticated and need minimal assistance
Duties to ALL Parties
Regardless of agency relationship, Montana licensees owe certain duties to all parties:
Universal Duties
| Duty | Description |
|---|---|
| Honesty | Deal honestly with all parties |
| Fair dealing | Act in good faith |
| Disclose material facts | Known material facts affecting value |
| Present offers | Present all written offers promptly |
| Account for funds | Properly handle all money received |
What Must Be Disclosed to All Parties
- Material defects known to the licensee
- Environmental hazards affecting the property
- Legal issues affecting title or use
- Personal interest in the transaction
Key Rule: Even when representing one party, a licensee cannot lie to or defraud the other party.
What must occur BEFORE a Montana licensee can act as a dual agent?
What is a statutory broker in Montana real estate?