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Non-disclosure to Be Interpreted in Florida
Posted By: Robert Delmar - 12/10/1999

Should Florida real estate licensees not disclose their agency relationships to non-represented sellers or buyers? That divisive issue may be decided next week when the Florida Real Estate Commission meets to interpret a new law.

Last January, the Florida Association of REALTORS® initiated legislation to repeal a simple "notice of non-representation" which had been required by statute since 1997. FAR promoted their legislation as "alleviating consumer confusion and saving trees."

Despite protests from consumer advocates, NAEBA, several REALTORS® and the Department of Business and Professional Regulation, FAR's powerful lobbying efforts succeeded in their bill being unanimously passed in both houses of the legislature.

FAR interprets the law to mean that licensees are not required to disclose any agency relationships to consumers whom they do not represent. DBPR has a different interpretation. Just prior to the new law taking effect on October 1, DBPR issued regulations requiring licensees to use agency disclosure forms which are spelled out in the new statute.

Soon after the DBPR issued its regulations, FAR initiated action to secure a judge's opinion through an administrative court proceeding. The court dismissed the case due to technical errors involved with FAR's filing. Now, it is up to FREC to either choose sides or issue a third interpretation.

Consumer advocates call Florida's new statute the "non-disclosure" law, and they say it is a step backwards of almost 20 years. That time frame relates to a Federal Trade Commission (FTC) investigation of real estate practices which revealed that 72% of home buyers thought the agents represented them when, in fact, almost 100% of the agents actually represented the sellers.

Since 1994, the National Association of REALTORS® has urged state REALTOR® associations to provide disclosures of licensees' relationships with consumers. In May, 1999, the NAR issued a report stating: "Licensees need to know exactly what their duties are to avoid lawsuits, and consumers should know exactly what duties they're entitled to from a licensee."

Contrary to such NAR policies, will FAR succeed in its efforts to make Florida the first state to rescind statutory requirements for agency disclosure? The answer to that question may be reached by the FREC on December 15.

Because the majority of FREC members are also FAR members, and because their duties involve consumer protection, their decision regarding FAR's "non-disclosure" law will be important to licensees and consumers nationwide.

What do you think? If Florida becomes the first state to rescind disclosure requirements, should other states follow? Do you believe that agents should disclose whom they represent to all non-represented parties?

Also See:

  • Florida's Non-disclosure Law Under Friendly Fire


  • Responses to this Article

    What have you got to hide?
    Posted by: j_wolf - 12/17/1999 11:19 AM


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