2.1 DC Agency Disclosure Requirements

The District of Columbia regulates how real estate licensees disclose brokerage relationships to the consumers they deal with. The governing law is D.C. Code § 42-1703 (within Title 42, Chapter 17, "Real Estate Brokers' Duties") and the licensing provisions at D.C. Code § 47-2853.196. The DC state portion of the PSI exam draws heavily on these rules, so memorize the timing, the form, and who receives disclosure.

Key Point: A brokerage relationship is the agency or non-agency relationship between a licensee and a client or customer. DC requires that this relationship be disclosed in writing so every party knows whose interests the licensee is protecting.

When Disclosure Must Be Given

Two phrases control the timing, and the exam tests both:

• "At the earliest practical time" — the licensee discloses as soon as it is reasonably possible.
• No later than when "specific real estate assistance" is first provided — the absolute deadline.

"Specific real estate assistance" means moving past casual conversation: discussing a particular property, a price, financing options, or the consumer's negotiating position. A licensee may exchange pleasantries at an open house, but the moment substantive help begins, written disclosure is due.

Timing by Scenario

Scenario: A licensee who represents the seller hosts an open house. An unrepresented visitor asks, "How low will the seller go?" Before answering, the listing agent must disclose in writing that she represents the seller, not the visitor. Anything she says could be used to the seller's advantage, and the buyer is entitled to know that.

Who Receives the Disclosure

The trap many candidates miss: you do not owe this statutory disclosure to your own client — you already have a written representation agreement with them. The disclosure runs to any party you do NOT represent.

Before providing specific assistance, the licensee must disclose in writing:

1. The identity of the party the licensee represents in the transaction, and
2. The brokerage relationship the licensee has with that party.

Memory hook: "Tell the other side whose side you're on." A buyer's agent talking to an unrepresented seller must say, in writing, "I represent the buyer." A seller's agent talking to an unrepresented buyer must say, "I represent the seller."

Conspicuous-Format Requirement

DC does not accept a disclosure buried in fine print. The notice must be conspicuous so a reasonable consumer would notice it. Any one of these formats satisfies the rule:

Exam Tip: If the disclosure is combined with other contract language, it must still stand out — bolded, capitalized, underlined, or boxed. A plain-text sentence mixed into a paragraph is not conspicuous and does not satisfy § 42-1703.

Rental (Landlord-Tenant) Disclosures

Rental transactions follow a parallel rule. A licensee must disclose to a landlord or tenant who is not the licensee's client by including the brokerage-relationship disclosure in:

If neither the application nor the lease contains a disclosure provision, the licensee must still make the disclosure in writing no later than the signing of the lease. There is no oral-only option.

Abrogation of Common Law

DC's statute expressly displaces conflicting common law:

"The common law of agency relative to brokerage relationships in real estate transactions to the extent inconsistent with this section shall be expressly abrogated."

In plain terms, where the DC statute and old common-law agency doctrines conflict, the statute wins. This is why DC speaks of "brokerage relationships" and "representatives" rather than relying purely on traditional master-servant agency theory.

Rights the Statute Does NOT Erase

Abrogating common law does not strip consumers of core protections. The law does not affect:

• A party's right to rescind a real estate transaction;
• A client's liability for misrepresentation, negligence, or intentional acts;
• A licensee's liability for misrepresentation, negligence, or intentional acts.

Duties That Survive Termination

When the brokerage relationship ends, two duties continue indefinitely:

Key Point: A former client's secrets stay secret. A licensee who learns the seller's bottom-line price may never use or reveal it, even after the listing expires.

Disclosure Is Not the Same as Consent

A frequent exam distinction: disclosing a brokerage relationship merely informs the other party — it does not create or change agency. Disclosure tells an unrepresented buyer "I represent the seller"; it does not make that buyer your client. To represent a party you need a brokerage agreement, and to represent both parties you need written consent (covered in section 2.2). Keep the two ideas separate on the exam: disclosure is a one-way notice; consent is a two-way agreement.

Scenario: A tenant's agent shows an apartment owned by a landlord the agent does not represent. Putting the agency notice in the lease application discloses the relationship, but it does not turn the landlord into the agent's client. The landlord remains a customer to whom the agent owes honesty and fair dealing, not the fiduciary duties owed to the tenant-client.