Disclosure of Relationship in Transaction Information
Relationships requiring disclosure include: the real estate agent's interest in the property (the agent is buying, selling, or has an ownership interest), the agent's relationship to the buyer or seller (family member, business partner, or close personal friend), the agent's relationship to service providers (the agent receives compensation from the lender, title company, inspector, or other settlement service provider), and dual agency (the agent represents both the buyer and the seller). Failure to disclose may result in: rescission of the transaction, disciplinary action against the agent, and civil liability for damages.
Florida Legal Definition
Disclosure of relationships in Florida real estate transactions is governed by: Florida Statutes §475.25(1)(b) (the real estate licensee must not be guilty of fraud, misrepresentation, or concealment), §475.278 (brokerage relationship disclosure), and RESPA Section 8 (affiliated business arrangement disclosure). Under §475.25(1)(b): the agent must disclose all material facts, including relationships that may affect the transaction. Under §475.278(3): a single agent must provide full disclosure to the principal. Under RESPA: if the agent refers the buyer to an affiliated service provider, the agent must disclose the relationship and provide the affiliated business arrangement disclosure.
How It's Used in Practice
Attorneys ensure proper relationship disclosures in real estate transactions. The attorney: identifies all relationships that require disclosure, prepares the required disclosures (brokerage relationship, affiliated business arrangement, and agent interest disclosures), ensures the disclosures are provided before or at the time of the transaction, and advises clients on the implications of undisclosed relationships. The attorney advises: failure to disclose a material relationship may result in: rescission, damages, and disciplinary action; err on the side of disclosure.
Key Takeaways
- Must disclose: agent interest, family/business relationships, and dual agency.
- §475.25(1)(b): concealment of material facts is grounds for discipline.
- RESPA: affiliated business arrangement must be disclosed.
- Failure to disclose: rescission, damages, and license discipline.
- When in doubt, disclose.
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Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC