Key Takeaways
- Virginia requires written disclosure of brokerage relationships at the first substantive discussion about specific real property
- Virginia recognizes three types of relationships: standard agent, limited service agent, and independent contractor
- A written brokerage agreement is required to establish a client relationship in Virginia
- Virginia law requires disclosure of agency relationships using the Disclosure of Brokerage Relationship form
- Dual agency is permitted in Virginia with written consent from all parties
Virginia Agency Relationships
Important: This content covers Virginia-specific agency law. You should complete the National Real Estate Exam Prep first, as agency concepts are also tested on the national portion.
Virginia real estate agency law is governed by the Virginia Real Estate Board regulations and the disclosure requirements set forth in the Virginia Code.
Key Definitions
| Term | Definition |
|---|---|
| Client | Party who has entered into a written brokerage agreement with a licensee |
| Customer | Party not represented by the licensee but to whom ministerial acts may be provided |
| Standard Agent | Licensee with full fiduciary duties to the client |
| Limited Service Agent | Licensee with reduced duties as specified in the agreement |
| Independent Contractor | Status unrelated to agency; refers to employment relationship |
Creating Agency Relationships
In Virginia, 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
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 only ministerial acts
- No fiduciary duties owed
- Honesty and fair dealing required
Ministerial Acts for customers include:
- Providing property information
- Scheduling showings
- Writing and presenting offers (as directed)
- Answering factual questions
Required Disclosures
First Substantive Discussion
At the first substantive discussion about a specific property, licensees must provide the Disclosure of Brokerage Relationship form.
First substantive discussion is defined as discussion about:
- A specific property
- Specific terms for a potential transaction
- Specific needs regarding price, location, or features
What is NOT a Substantive Discussion
- General conversation about the market
- Providing brochures or MLS listings
- Answering general questions about an open house
Types of Agency Relationships
Standard Agent
A standard agent provides full fiduciary duties:
| Duty | Description |
|---|---|
| Loyalty | Put client's interests first |
| Obedience | Follow lawful instructions |
| Disclosure | Reveal all material information |
| Confidentiality | Protect private information |
| Accounting | Handle funds properly |
| Reasonable Care | Act competently and diligently |
Limited Service Agent
A limited service agent provides reduced services as specified in the agreement:
- Must clearly state which duties are limited
- Client must agree in writing to the limitations
- Common limitations include reduced marketing, limited availability
- Cannot limit disclosure of material facts or agency duties
Duties Owed to All Parties
Regardless of representation, licensees owe ALL parties:
- Honest dealing - No fraud or misrepresentation
- Disclosure of material adverse facts about property condition
- Timely presentation of all written offers
- Accurate accounting of funds
When must a Virginia licensee provide the Disclosure of Brokerage Relationship form?
In Virginia, what is required to establish a client relationship?