PAR Legal Hotline Attorneys Recap Head-Shaking Scenarios

While you hope that most of your days in real estate are typical, we all know that isn’t always the case.

Yesterday, PAR’s legal team offered a Legal Hotline webinar on some of the most head-shaking scenarios they’ve seen and heard.

Assistant General Counsel Desiree Brougher started the webinar talking about tenants leaving behind belongings. But what if a tenant leaves a pet?

According to law, a landlord cannot get rid of belongings without express permission from the client. But when are belongings considered abandoned? Landlords must provide written notice that they are disposing of belongings to the tenant and the tenant has 10 days to respond. The landlord may store up to 30 days. But what about a dog?

Brougher said unfortunately, there is not a clear answer that PAR can provide and instead advised that a local attorney would be the best way to settle the situation.

Now let’s say you handled the dog issue and are interested in going into another business, while still doing real estate. Associate Counsel Brian Carter said the first thing you need to ask yourself is if you are legally allowed to do it.

“Your real estate allows you to sell real estate. That’s it.” While that license allows you to do residential, commercial, property management and any other sort of real estate activity, agents can’t just set up ‘side businesses’ for that purpose “If real estate is involved, it has to go through your brokerage,” he added.

And if you want to sell something besides real estate, “you need to find out what the licensing requirements are and what you need to do,” said Carter. You may find that some other license or certification is required if that work isn’t within the scope of your real estate license. Even when no license is required, ask yourself if you are competent or need to learn more before diving into a new field. “Education is a great way to understand something like property management or brokerage management. Seek out professional mentors.”

“Just because you can doesn’t mean you should,” Chief Legal Officer Hank Lerner added.

Standard forms are another hot topic on the Legal Hotline.

“We have had calls where members want us to explain a form because they haven’t used it before,” said Associate Counsel Kacy Clouser. “That is not what we are there for. Deciding what form to use in a specific situation can be discussed, but we cannot teach you the details how to use a form in your transaction in a few minutes on the Legal Hotline.” This is a job best suited for your broker or manager, which also helps them keep tabs on the types of real estate activity going on in the office.

Clouser reminded members that nearly every form has guidelines available to learn how to use it.

“Make sure you are aware of the clauses and how they function,” said Clouser. “Don’t do what you always do, make sure you know what your client wants.”

If you need to draft language for a contract, Clouser advised working with brokerage counsel.

“We cannot interpret language we did not draft,” she said.

“The market has been crazy for the past three years. It made agents use different forms. If it has been a while since you have read a form, re-read and understand it before you send it to your clients,” added Clouser.

Speaking of forms, did you make sure to sign an agency contract with that buyer or seller?

“They are not your clients until they sign the contract,” said Lerner. “Without an agency contract with a buyer, they are not your client and you won’t have grounds to sue for a fee if they ultimately decide to use another broker.”

There are also stipulations in certain circumstances. Power of attorney, estates and divorces can all impact the ability of someone to sign a contract. “It can be tempting to sign up a client who assures you that they are ‘going to be’ authorized to sign as a POA, executor, or for some other reason in the future, but you should make sure you have something in writing, that says they’re able to sign in that role at the time of signing,” Lerner added. 

If you are thinking of switching brokerages, you better do some research to see what happens to your clients. “If an agent leaves a brokerage, whose client is it? How does your contract with the brokerage work? If you move brokerages and your client stays with the first brokerage, they are no longer your client. You may get paid for the transaction depending on your contract. You cannot work with clients who are signed with another brokerage,” Lerner said.