Oregon Real Estate News-Journal March 2003

1 Oregon real EstateNews-JournalOfficial Publication of the Oregon real Estate AgencyIN THIS 2004, Salem, OregonNo. 1 Manual Update 2 Administrative Rule 3 agency Personnel, Board 3 Requirements to Keep Your 4 Upcoming 5 Assistance for Potential Hispanic 6 New Loan Program for First-time 6 Construction Contractors Board Has New Developer License 6 real Estate agency Website 6 Unclaimed Property - A Helpful Law 7 Administrative 8 agency DISCLOSURE, DESIGNATED agency ,DISCLOSED LIMITED agency ISSUESS cott W. Taylor, real Estate CommissionerWe are nearly two years into the newlaw and from my perspective thingsseem to be working well. As time goeson, however, there will be issues thatneed clarifying. Two issues that are re-lated come to first issue relates to the InitialAgency Disclosure pamphlet . If a lic-ensee representing a seller exclusively,and who will not be representing thebuyer, comes in contact with a buyerexpressing interest, is it necessary forthe licensee to give the buyer a pam- phlet if the licensee explains that he orshe will only be representing the seller?

2 OAR 863-015-0215(2) providesthat a licensee need not give the pam- phlet to someone who has or can bereasonably assumed to have received acopy from another licensee. A licenseecould reasonably assume that a partyhas already received the pamphlet if theagent knew the party was under a list-ing contract or buyer service agreementwith another broker, for example. How-ever, in this case the buyer does not fitthe above important thing to rememberwith the initial agency disclosure pam- phlet is that it is intended only for in-formational purposes and does not es-tablish any kind of relationship in it-self. It is designed as an aid for a con-sumer to make an informed choiceabout representation. Whether theagent represents the seller or not is notrelevant at this point because present-ing the pamphlet is about the con-sumer, not the agent. Seeking repre-sentation does not necessarily meanseeking it from the seller s agent.

3 Thatthe buyer could or could not get rep-resentation is not the issue. The ques-tion is, could the buyer reasonably as-sumed to be seeking representationfrom someone?Because the purpose of the pam- phlet is to provide information to aconsumer to aid in making an informedchoice, the question is more closely, Isthere any reason to know this person isnot seeking representation? Everystudy I ve ever read has found the over-whelming majority of consumers,when asked if they want representation,answer in the affirmative. Therefore alicensee confronted with these circum-stances should be thinking, Could thisperson be seeking representation? Ifthe answer is yes, the pamphlet mustbe given. Another way of putting itmight be, When in doubt, give it out! The second issue relates to what hascome to be known as designatedagency, disclosed limited agency , andthe disclosed limited agency (4) states: In a realestate transaction in which differentreal Estate brokers associated with theAGENCY ISSUES: continued on page 2 Commissioner Scott TaylorOREN-J , 3:28 PM1 Oregon real Estate news -JOURNAL2 March 2004 Oregon real ESTATENEWS- journal (USPS 905-220)Official PublicationOregon real Estate Agency1177 Center St.

4 - Salem, Oregon 97301-2505 Telephone: (503) 378-4170 Web Page: real Estate AGENCYT heodore R. Kulongoski, GovernorScott W. Taylor, CommissionerREAL Estate BOARDV ictor Kee, Kegler ..BoardmanRobert La Du ..PortlandMaxine Ribera-Card .. BendVada Salinas ..SalemMarianne Wood ..EugeneJohn Zupan .. MedfordThe Oregon real Estate News-Journal is published four timesa year by the Oregon real Estate agency as an educationalservice to all real Estate licensees in the state under the provi-sions of Section of the Oregon Revised Statutes.$ subscription fee included in real Estate li-cense fee. All other subscriptions $ per year. POSTMAS-TER: Send address changes to Oregon real Estate news -Jour-nal, 1177 Center St. , Salem, OR Reynolds, EditorVOL. 58-No. 1 March 2004 Periodicals postage paid at Salem, Oregonsame principal real Estate broker estab-lish agency relationships with differentparties to the real Estate transaction, theprincipal real Estate broker shall be theonly broker acting as a disclosed limitedagent representing both seller and brokers shall continue to representonly the party with whom the broker hasan agency relationship unless all partiesagree otherwise in writing.

5 [Emphasisadded.] This has come to be known asdesignated agency and it is the default inthe law in such agency , as set out in (4) will work for offices as smallas two licensees where one is the princi-pal broker or for offices as large as twothousand or more licensees. However, forvarious reasons some companies have cho-sen not to use designated agency , and areinstead having all licensees involved in thetransaction as well as their principal bro-ker act as disclosed limited agents. Com-panies with more than one licensee whochoose not to use the relationships set outin ORS (4) fall into the unlessall parties agree otherwise in writing pro-vision of (4).ORS (1) requires the use ofa disclosed limited agency agreement withfull disclosure of the relationship in thosetransactions where licensees represent morethan one client. The disclosed limitedagency agreements set out in OAR 863-015-0210(3) for sellers and (4) for buy-ers are written to conform to the defaultin the law, discuss designated agency , andgain consent for the brokers to use desig-nated agency in a transaction requiringit.

6 As the law does not speak to situationswhere a company has chosen to use dis-closed limited agency in transactionswhere the law defaults to designatedagency, the form does not provide for con-sent for all of the involved licensees tooperate as disclosed limited to the requirement of (1), OAR 863-015-0120(1)and (2)(a) through (f ) set forth the re-quirements for disclosed limited agencyagreements. Briefly, the requirements are:the agreements shall be in writing, signedand dated; the involved real Estate busi-ness shall be named; any existing listingagreements or service agreements shall beidentified; the names of the licensee(s)including the principal broker who willbe representing the client; use of a plainlanguage description of the requirementsof ORS ; full disclosure of theduties and responsibilities of an agent rep-resenting more than one party in a trans-action (which can be met by providing acopy of the initial agency Disclosure Pam- phlet , discussing the portion of the pam- phlet addressing the duties and responsi-bilities of an agent representing more thatone client in a transaction, and incorpo-rating the pamphlet by reference).

7 Andconsent and agreement between the par-ties to the disclosed limited agency agree-ment regarding representation of the cli-ent in future real Estate agency believes thatit should not design forms that go be-yond the default set out in the statute, asdoing so could constitute the giving oflegal advice. Licensees whose office poli-cies dictate that they not practice desig-nated agency are advised to seek legal ad-vice either individually or through theirprofessional organizations before eithermodifying the existing forms set out inOAR 863-015-0120(3) and (4) or draft-ing custom forms to ensure the formsaddress the requirements for disclosed lim-ited agency agreements set out in OAR863-015-0210(1) and (2). agency ISSUES: continued from page 1 The agency s Oregon real EstateManual contains discussions of real Es-tate License Law and related topics, andincludes copies of real Estate laws andrules.

8 The Manual was updated to re-flect changes to laws and rules after the2003 legislative session Changes in-clude revisions to seven chapters of theManual, addition of the 2003 versionsof real Estate -related chapters of theOregon Revised Statutes (Chapters696, 90, 91, 92, 94, 100, and 105),and a new Manual update will be available for dis-tribution the first week of April. TheAgency will distribute the updatedManual materials to Subscription Ser-vice subscribers for the 2003-2005 bi-ennium, and to all purchasers of the2003 Manual. The updated materialMANUAL UPDATE AVAILABLE will be distributed the first week Manual Update SubscriptionService can be ordered for $12 by send-ing in the Publication and Videocas-sette Order Form, which can be foundon the agency s website The subscriptionservice provides revisions to the text ofthe Manual along with updated realestate-related statutes and rules.

9 Thesame order form can be used to orderthe full Manual for $26. The Manualis also available for purchase at theAgency at the reduced price of $ you want more information aboutthe Subscription Service, or clarifica-tion regarding the materials you willreceive, please contact the EducationDivision at (503) , 3:28 PM2 Oregon real Estate news -JOURNAL3 March 2004 ADMINISTRATIVE RULE CHANGES real Estate LICENSEES AND ESCROWThe real Estate agency filed pro-posed revisions to administrative rulesrelated to real Estate licensees and es-crow and escrow agents. The revisionswill be effective May 3, Estate Licensing rules OAR863-015-0015 (Application; Back-ground Check) , 863-015-0055(Continuing Education) and 863-015-0200 ( agency Relationships)were previously amended by tempo-rary rule. The proposed rule revisionsinclude the permanent amendmentof those rules. In addition, the pro-posed changes to OAR 863-015-0020 (Licensing; Examinations),863-015- 0025 (Licensing; Gener-ally), 863-015-0050 (Licensing; Re-newal), 863-015-0065 (Inactive Li-cense), 863-015-0080 (NonresidentLicense) and 863-015-0180 (Unli-censed Activity) are required to fixinconsistencies within the rules,among other things, promulgatedsubsequent to the passage of SenateBill 206, and are necessary to furtherimplement the policies and proce-dures contemplated by the legisla-tion.

10 The proposed change to OAR863-001-0007 (Refunds) is to re-duce to one year the time period forrefunding rule OAR 863-050-0035(Letters of Credit) was previouslyadopted by temporary rule effectiveJanuary 14, 2004. This notice in-cludes the permanent adoption ofthat rule. In addition, Escrow rulesOAR 863-050-0020 (Notice of In-terest) and 863-050-0115 RecordsRetention) are being amended to fixinconsistencies within those rules,which were promulgated subsequentto the passage of Senate Bill can obtain more informationabout the proposed rules in severalways. The proposed rules will be pub-lished in the Secretary of State s(SOS) Oregon Bulletin, April 1,2004 which is available either inpaper format by calling (503) 373-0701 or through the SOS websiteat ,and clicking on administrativerules then current bulletin. An edited copy of the rules show-ing the current and proposed lan-guage may be viewed and down-loaded at the agency s website, An unedited copy of the final rulesmay be viewed and downloaded A hard copy of the text of the pro-posed rule changes may be ob-tained by calling 503-378-4170,ext.