Forms Focus
Shhh ... KEEP IT QUIET!
GAR Forms Deal with Confidentiality Issues During a Transaction
Most agents understand that they have a BRRETA* duty to keep confidential any information that their clients request not to be disclosed. Article 1 Standard of Practice 1-9 of the National Association of REALTORS® confidentiality, stating that, “REALTORS® Code of Ethics also addresses the duty of shall not knowingly, during or following the termination of professional relationships with their clients reveal confidential information of clients.”
Unfortunately, it appears that some agents believe this duty of confidentiality applies to the customers or clients of other agents. Complaints that the other agent in the transaction shopped (revealed the contents) the offer/counteroffer to other buyers/sellers, which caused their client to lose the deal (and of course they did not get a commission), are commonplace. As the agent of a seller/buyer client, you have no duty of confidentiality to the other agent’s buyer/seller. If a client instructs you to shop the offer to try to get a better deal, you must obey the instructions of your client.
The GAR forms package has two forms that you can use to address this issue:
[1 ] F142 AGREEMENT TO KEEP OFFERS CONFIDENTIAL {revised for 2016}
[2] F148 CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT {new in 2016}
If your buyer client wishes to make a confidential offer on another company’s listing, then you must submit F142 to the listing agent prior to making that offer. If the seller and the listing agent both sign and return F142, then you would submit the offer to the listing agent. In filling out F142, make sure to identify all the parties — buyer, selling agent, seller and listing agent and make sure each has signed the agreement. In Paragraph 1, you must check box (a.) to make the buyer’s offer/counteroffer confidential. The seller may check box (b.) so that their counteroffers/offers will also be confidential. If you do not fill in a reasonable number of days for the confidential agreement to be in effect in paragraph 2a., then per 2b., the confidential agreement expires two days after the expiration of the offer/counteroffer.
In some transactions — especially commercial ones — the buyer may request information (rent rolls, financial statements, etc.) about the property or business from the seller prior to making the offer. The seller may not want to release this information without the buyer agreeing to make the information confidential. Prior to providing the buyer the requested information, the listing agent must have the buyer, selling agent, seller and listing agent sign F148.
Both F142 and F148 allow buyers and sellers to share confidential information with brokers, family members, advisers, attorneys, accountants, etc. The party sharing confidential information is responsible for making sure all parties with whom they share information understand that the information must be kept confidential. All parties that have access to the confidential information (including agents) must understand that disclosing the confidential information may cause significant financial and/or other damage to a party in the transaction.
*GEORGIA BROKERAGE RELATIONSHIPS IN REAL ESTATE TRANSACTIONS ACT
26 I GEORGIA REALTOR® FALL ISSUE 2016
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