Appointment of Agent – Ohio Agency Law Requires Authorization

Posted on: October 12th, 2015 by Andrew Clark No Comments

Whether a licensee leaves a brokerage, or is just going on vacation, there are times that representation of a client must be delegated to another non-management-level licensee within the brokerage.  When this happens, Ohio law requires that a brokerage obtain authority to make such appointment.

Ohio law permits two options for the appointment of an agent, when the listing agent (or management level licensee) will not be available to service the listing.  Clients can authorize their agent to make appointments on their behalf in their agency agreement or appointments can be authorized by the client when needed.  With the first option, clients will delegate to their agent the authority to appoint other agents within the brokerage to represent them.  That delegation must be in writing.  It must be signed by the client.  And, it must contain language notifying the client of his right to veto any appointment.  In the second scenario, consent of the client must be obtained.

The Cincinnati Area Board of REALTORS®’ agency agreements provide for the appointment of agent.  And, if the need arises, notice must be given to the client of such appointment.  Optional forms developed by the Ohio Association of REALTORS® are available in the OAR Agency Compliance Manual (pgs. 18-20) for this purpose.  The same authorization is required for clients subject to buyer/tenant/property management representation agreements.

Below are a few frequently asked questions regarding the appointment of agent:

  • Q: Do I have to get my seller’s authorization in writing to give me the authority to appoint other agents to represent them?

 A: Yes.

  •  Q: If my listing agreement contains language delegating to the listing agent the authority to appoint other agents to represent the seller, does the listing agent have to give the seller notice when an appointment is made?

A: Yes. The seller must be notified at the time of the appointment. It is recommended that this notification be in writing.

  • Q: What if the seller vetoes the appointment?

A: The appointment cannot be made or would terminate upon the agent’s notification of the veto.

  • Q: Can I include language in my property management agreement that delegates authority to the managing agent to appoint other agents in our brokerage to represent the owner?

A: Yes.

 

  • Q: Under my brokerage policy if another agent needs to be appointed to represent a client, the appointment will be authorized by the client when that occurs. Does the client’s authorization have to be in writing?

 

A: No, but you must have the client’s “specific” consent. Therefore, it is a good business practice and strongly recommended that you have it in writing.

 

  • Q: When I am on vacation, another agent in our brokerage covers my transactions. Should that agent be appointed to represent my clients?

A: In order to be able to provide agency-level service to your clients while you are gone, it is best that this agent be appointed to represent your clients.

 

  • Q: I am going on vacation and another licensee in our brokerage will be appointed to represent my seller. When I return will that agent still be considered the seller’s agent?

A: Yes, unless the parties agree otherwise.

  • Q: Could the appointment be limited? For example, could it indicate that the agent is only appointed to be the seller’s agent for the three weeks I am on vacation?

 A: Yes, as long as the seller agrees that type of language could be written in the appointment. The appointment should specifically indicate when the agency relationship begins and ends, and should explain the agent’s duty to maintain any confidential information even after the term of the appointment has ended.

 

  • Q: If the appointment were limited, could the agent later represent a buyer on that seller’s property?

 

A: Yes, however, the agent could not disclose any confidential information to the buyer that was learned during the time the agent was appointed to represent the seller.

 

  • Q: Is it possible for a management-level licensee to cover for me when I’m not available so I don’t have to go through this appointment process?

 

A: Yes, since management-level licensees are already bound by your agency relationship, no appointment would be necessary.

 

  • Q: If I hold an open house for another agent in our brokerage, will that automatically make me the seller’s agent? Do I have to be appointed as the seller’s agent to hold an open house for the listing agent?

 

A: You are not required to be appointed to represent the seller to hold an open house on behalf of the listing agent. You would only be found to represent the seller if such an appointment took place, if you hold a management position in the brokerage, if you received confidential information from the listing agent, or if you originally helped the listing agent get the listing.

 

  • Q: Should it be explained to the seller that the agent holding the open house is not the seller’s agent?

 

A: Although not technically required, it is recommended, so the seller doesn’t share confidential information with that agent.

 

See more at: http://ohiorealtors.org/legal/agency-law-resources/agency-faqs/#Appointment