Questions:  RECAD, Megan's Law

by Charles R. Sowell

The following article was written by Charles R. Sowell, General Counsel for the Alabama Real Estate Commission, and originally appeared in the Alabama Real Estate Commission Newsletter: UPDATE, Summer 1998.  The entire article is provided with permission of the author. 

It should be noted that the information provided pertains to the agents, the clients and customers they serve who reside in Alabama.
It is a classic version of the old joke.  The good news is my telephone rings almost all the time. The bad news is I have to answer it. Yadda. Yadda. Yadda.  I like talking to you, but it sure is hectic sometimes. Here are some sample calls with responses. Maybe some will ring a bell with you.
RECAD QUESTION:

I have an agency listing agreement to sell my client’s home. He wants to sign a buyer’s broker agreement with another company to find him a replacement home while my company tries to sell his existing home. It is okay with me, but can he do this? I mean, can he enter into two agency agreements at the same time?

ANSWER: Yes he can. A listing agreement and a buyer’s broker agreement create agency relationships for two separate purposes. One is to sell a property.  The other is to buy a property. I have never seen a version of either which would prevent the hiring of two agents at the same time. RECAD certainly does not prohibit it.
ANOTHER RECAD QUESTION:

I am a builder/developer who only sells my own properties. Specifically, I have agents on site in my subdivisions who are there to sell my homes. When potential buyers come to my properties, does this make my on site agents limited consensual dual agents?

ANSWER: My goodness, no. You are both the qualifying broker and the owner of the properties. To put it simply, you should not pretend you do not represent yourself. Your agents should be trained carefully to treat potential buyers as customers. Your company has no agency relationship with them. There might be very rare occasions where you sell a home to a family member or close friend. If the relationship is so close that you truly cannot treat them as customers, then you will have to act as a limited consensual dual agent, unless they engage a buyer’s broker or an attorney to negotiate on their behalf.
MEGAN’S LAW QUESTION:

I own a home listed with a real estate company. I have relocated out of state  My neighbor has given my listing agent a copy of a notice from the sheriff’s office. This notice has a picture with information on a man who is a criminal sexual offender. He is being released from prison, and is moving into my neighborhood. I really need to sell my home. Does my agent have to tell buyers about this?

ANSWER: There is no law or court case which answers this question. That means we have to make an educated guess. The law on the sale of existing homes in Alabama does say that potential buyers have to be told about defects which could affect the health or safety of a buyer or occupant of the house. You can bet that a family injured by such a person will likely file suit against you, and all agents involved in the sale. If a case like this gets to a jury, and it probably would, I do not think you have to be a lawyer to figure the likely result. We advise brokers who have listings to get consent of the owner to make the disclosure.  If the owner refuses, then the broker and the owner have to decide whether to take the risk. For a broker and the agents involved it means possible loss of their licenses, and the loss of every asset which is not judgment proof. I know of no broker who has taken that risk. I advise you not to take it, either
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NOTE: A sexual offender notification law like ours in Alabama is commonly referred to as Megan’s Law. This is because of a tragic, terrible crime committed by a recently released sexual offender some years ago in New Jersey, I believe it was. His victim was a little girl. Her name was Megan. His prior victims were children. No law gave notice to the neighborhood of his release. Public outcry lead to the enactment of notification laws in many states Alabama’s Community Notification Act is at Section 15-20-20 Code of Alabama 1975, as amended. In an interesting move some other states have made it law that real estate licensees have no duty to disclose this information.
EDITOR'S NOTE:  This site provides Information on Megan's Law and and a link to the LIST of Alabama sex offenders as provided on Alabama State's Registered Sex Offender's Registry Web Site.
Here are some calling tips to help us serve you. I share our division’s calls with our investigators, David Erfman, and Charles (Chuck) Kelly. They take as many as I do. If your call is really not for us, try to direct it to the correct division, i.e., licensing, education, etc. Please be patient as we get to you. If you are not a qualifying broker or manager, consult them about your problem before you call. Do not suggest that someone with any real estate related problem call us. We are only here to answer your questions about license law, and to take complaints about licensee activity from the public.
Again, it should be noted that the information presented in the preceding article relates ONLY to people buying & selling houses in the state of ALABAMA and their agents.
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Author / Editor Jim VanErmen is a: Licensed Alabama Real Estate Broker employed as an Associate Broker with Apex Listing LLC.,
An approved Alabama Real Estate Instructor / Educator, and Co-Founder Central Alabama Real Estate Academy
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