by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
There are many brokers and broker's attornies on DIRT. Is the broker's behavior in this case standard practice? Would it be regulated in other states? Is it ethical?
I assume that brokers commonly advertise on the basis of an informal understanding as to listing, although that might itself be actionable. What if a broker advertises before there is any understanding concerning the listing agreement - essentially holding itself out as an agent at a time when no agency authority exists?
BROKERS; LICENSING: The legislature has the power to determine the disciplinary standards applicable to real estate brokers and sales persons and a real estate commission should not expand the express language of a disciplinary statute. Bowen v. State, Wyoming Real Estate Commission, 900 P.2d 1140 (Wyo. 1995). In this case, the court found that the Real Estate Commission improperly relied upon a statute authorizing a penalty for a broker's failure to obtain a written listing agreement as the basis for suspending a broker's license. The Commission found that the broker had failed to obtain a written listing agreement from the property owner before the broker advertised the property for sale. However, the statute did not require that the listing agreement be obtained before the broker may advertise the property. It only required that the broker enter into a written listing agreement with the seller at some point.
Comment: Many state statutes provide for license discipline on the basis of "false or deceptive practices," or some other broad "catchall" grounds that permits the Real Estate Commission to define inappropriate behavior by regulation. The conduct in this case may or may not fit within such a broad definition, but it probably could not be the subject of discipline without some further clarification by Commission regulation.
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