The listing agreement can be a veritable minefield of liability. When the Greater Capital Area Association of REALTORS® (GCAAR) was formed a year and a half ago, it found that its forms were outdated in its explanations of laws and disclosure forms required, facilitating the need for a new listing agreement. What the GCAAR is finding is that creating a new agreement isn't easy.

Not only did the new association have the challenge of merging a county association, Montgomery County Association of Realtors with the District of Columbia, and hurdling cross-jurisdictional issues such as how dual agency is handled in each respective area, the GCAAR also is grappling with a range of topics from how to include Internet marketing to keybox access.

Mary Lou Shannon knew that at the least the new forms would have to have clearer language, address new issues, facilitate closings, and save paperwork. Shannon, a volunteer on the Contract Forms Committee for the past few years, is working with other agents, managers and settlement attorneys to provide as much of a bullet-proof document as possible.

"Many jurisdictions have not redone their forms, and we are each struggling to produce our own," says Shannon. "Many forms just aren't appropriate for today."

She cites use of the Internet as a prime example. "One of the changes in the way we market is through the Internet, so we need to make sure that we have permission to use any medium the broker decides to promote the property. Right now, the forms don't handle the use of photographs, videos, etc."

Property conditions and lead paint disclosures are also a problem. "The property condition in the use of required forms is critical in our business and the forms have to be up to date," states Shannon. In Maryland, sellers have the option not to fill out a property condition form, but the seller is still responsible for disclosing material defects to the listing agent, regardless of whether he is completing a property disclosure form.

The committee is waiting to hear case law in reference to key box access, which will also be covered in the new listing form. "Protecting the broker and the membership is important," says Shannon. "The seller is advised to have his own liability insurance. We make it clear that we are not insurers of the property and are not liable for theft, vandalism or loss due to the use of the keybox."

Agency, disclosure and fees could be the association's biggest challenges. "We are trying to define the different types of agency, which will require forms that will be part of this agreement, particularly for permission to practice dual agency," explains Shannon. "We are defining the different terms so that the sellers understand the different roles we (agents) could be in." Shannon says that the association will not, however, duplicate required disclosures in the listing agreement.

Finally, Shannon hopes to address property liens in the new listing agreement. She says that many home equity loans have been paid off prior to settlement, but that some of these loans have not been released, wreaking havoc at closing time. The listing agreement will require the seller to show evidence of release of lien when the title work comes back, well before closing. "Right now, they think if they don't fill out the form, they don't have to disclose things. We are making it really clear," says Shannon.

In addition to better clarification of agency, lead paint disclosures and keyboxes, the committee will be addressing plainer English, fair housing protected classes for both jurisdictions, items and systems that convey, authorizations for sign, ads and photos, and a handy checklist of required disclosure forms and those seller needs to complete with permission to allow the agents to make them available to the prospective buyers.

The board of directors has yet to approve the first draft. Shannon, who is in charge of rewrites, laments, "Every time I look at it, I find changes/improvements so am not rushing it."

She has turned to other associations for help, but has found some good examples to follow, but because of copyright laws, the associations have refused to allow the GCAAR to use their language. Shannon wonders how the smaller boards can afford to pay attorneys to draft new forms. "We are trying to save the association money by doing most of the work ourselves."

Still she is undaunted, spurred on by the rewards to come. "I imagine when we actually sit down with sellers with this easy-to-read, logical, outline-format five-page document with check offs for receipt of disclosures, etc, that we will look professional and feel protected and have all the information we need to proceed with gusto," says Shannon. "We will be making obsolete some other forms and in the end saving paper, and the settlement attorneys should have all the loan/lien information to proceed to settlement."

Does your association have updated forms to share? Do you have suggestions for Shannon or the GCAAR? Let us know by responding below.