Key Takeaways
- North Dakota requires written agency disclosure at the first substantive contact with any party
- The agency disclosure must be a separate written document offered for signature
- Licensees must explain the different types of representation available (seller's agent, buyer's agent, dual agent)
- Any change in representation, including dual agency, requires a new disclosure immediately
- The disclosure must identify which party the licensee represents in the transaction
Agency Disclosure Requirements
North Dakota law requires real estate licensees to provide clear, written disclosure of their agency relationships to consumers.
Timing of Disclosure
The agency disclosure must be made:
- At the time of first substantive contact between the licensee and any party to the transaction
- Before any confidential information is discussed
What is "First Substantive Contact"?
| Situation | When to Disclose |
|---|---|
| Listing presentation | At the beginning of the meeting |
| Buyer inquiry | Before discussing needs or finances |
| Open house | Before substantive conversation |
| Property showing | Before touring the property |
Required Disclosure Content
The written agency disclosure must:
| Requirement | Description |
|---|---|
| Identify representation | State which party the licensee represents |
| Explain options | Describe different types of representation available |
| Be separate document | Must be a standalone written document |
| Offer for signature | Must be presented for the party to sign |
Types of Representation to Explain
The disclosure must explain:
- Owner's (Seller's) Agent - Represents the seller's interests
- Buyer's Agent - Represents the buyer's interests
- Dual Agent - Represents both parties with consent
Key Point: The explanation must include how the party's interests will be represented under each type of agency.
Changes in Representation
If the agency relationship changes during a transaction:
| Trigger | Requirement |
|---|---|
| Change to dual agency | New disclosure must be made immediately |
| Change of represented party | New disclosure required |
| Initial disclosure becomes incomplete | New disclosure required |
Warning: Any change that makes the initial disclosure incomplete, misleading, or inaccurate requires immediate new disclosure.
Documentation Requirements
Signature
| Party | Signature Required? |
|---|---|
| Licensee | Yes - must sign disclosure |
| Consumer | Preferred but not mandatory |
| If consumer refuses | Note refusal on the document |
Record Keeping
Licensees must:
- Keep copies of all agency disclosures
- Maintain records for the required retention period
- Be able to produce records if requested by NDREC
Consequences of Non-Disclosure
Failure to properly disclose agency relationships may result in:
| Consequence | Description |
|---|---|
| Disciplinary action | NDREC investigation and penalties |
| License suspension | Temporary loss of license |
| License revocation | Permanent loss of license |
| Civil liability | Potential lawsuits from harmed parties |
Exemptions
Agency disclosure may not be required for:
- Casual conversations that don't involve confidential information
- General inquiries about licensing or market conditions
- Transactions exempt from licensing requirements
Best Practice: When in doubt, provide the disclosure. It's better to over-disclose than to face disciplinary action.
Company Policy
Brokerages should maintain:
| Policy Element | Description |
|---|---|
| Standard forms | Approved agency disclosure forms |
| Training | Ensure all agents understand requirements |
| Procedures | Clear process for when and how to disclose |
| Supervision | Broker oversight of compliance |
When must a North Dakota licensee provide agency disclosure to a party?
What must North Dakota licensees do if their agency relationship changes to dual agency?