When do I need to disclose if the seller is a real estate licensee?
Here are the policies…
Canopy MLS Rules and Regulations
SECTION 1.10: SELLER'S NAME ON LISTING: If Seller(s) (excluding Member Participants and Subscribers of Canopy MLS) indicate on the listing agreement to withhold their names and other contact information, the Listing Brokerage may honor this stipulation and not submit that information to the Service.
Member Participants and Subscribers must show their name(s) in the Seller field, and check “Yes” in the Agent/Owner field, if they are the owners of or have an ownership interest in the property submitted to the Service. If the owner is not obvious (i.e., ownership by a business entity and the Member Participant or Subscriber has an ownership interest), the Listing Brokerage shall make the disclosure in the Agent Remarks section. (Amended 5-08)
Code of Ethics
Realtors® shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner’s agent or broker. In selling property they own, or in which they have any interest, Realtors® shall reveal their ownership or interest in writing to the purchaser or the purchaser’s representative. (Amended 1/00)
• Standard of Practice 4-1
For the protection of all parties, the disclosures required by Article 4 shall be in writing and provided by Realtors® prior to the signing of any contract. (Adopted 2/86)
NCREC, 2005-2006 Update Course: Rule A.0105 - Advertising
Licensees as Principals
When a licensee is a principal in the transaction, that is, the licensee is the buyer, seller, lessor, or lessee, must s/he disclose that s/he is a licensee? The answer depends on whose rules one is following. Note that Commission Rule A.0105(a) requires all advertising to include the name of a broker or brokerage company when a licensee is advertising real estate “...for another or others ....” Thus, read literally, the rule does not seem to apply to situations where a licensee is not representing others, but rather is a party-principal in the transaction. Similarly, there is no statute which requires licensees to disclose their license status when they are not representing others in a transaction. Nonetheless, the Commission strongly recommends that licensees inform others with whom they are dealing that they in fact have a broker or provisional broker license, even if the license is inactive or expired, when the licensee is representing him or herself in a transaction. While a licensee might not be subject to disciplinary action for failing to make this disclosure, it is in his/her own best interests to advise the other party or parties that s/he in fact has or had a license to avoid complaints later of unfair advantage by virtue of the licensee’s education and experience. Informing the other side that one has or had a license defuses that potential accusation and puts the other side on notice that if they want representation, they should get their own agent.
CAVEAT: While neither License Law nor Commission rules mandate this disclosure (even though it is strongly recommended that licensees disclose their license status), be aware that the REALTOR® Code of Ethics requires licensees who are members of the REALTOR® organization to disclose in writing prior to making an offer that they are a REALTOR® (i.e., a broker or provisional broker) whenever they are a party to a transaction. (See Article IV, Code of Ethics, and Standard of Practice 4.1.)
As an aside, licensees should be aware that they will be held to a higher standard even when they are a party in a transaction and not acting as an agent for another. G.S. 93A-6(b)(3) provides that a licensee may be subject to disciplinary action if s/he has “... violated any of the provisions of G.S. 93A-6(a) when selling, leasing, or buying his or her own property.” The primary effect of this is to prohibit licensees from engaging in misrepresentations, making false promises, failing to disclose material facts, acting for anyone other than him/herself without the knowledge of all involved, paying consideration to unlicensed persons, engaging in the unauthorized practice of law, or engaging in any conduct which constitutes improper, fraudulent or dishonest dealing. Note that, unlike unlicensed property owners, licensees, whether an entity or an individual, must disclose material facts when selling or leasing property they own.
Note that if a licensee seeks to work through a real estate company when the licensee is selling, purchasing, or leasing his/her own property, then the licensee must have the appropriate written agency agreement with the company and the agent representing the licensee is acting in a fiduciary capacity to the licensee-principal and must comply with all license law and rules. Thus, any advertising done by the company for the property must disclose that it is the advertisement of a broker and not the licensee-owner.