If the court approves the proposed antitrust settlement agreement between the National Association of REALTORS®   and the plaintiffs, MLS Participants who are working with a buyer will be required to enter into a written agreement before the buyer “tours any home.”

Must the contract be an Exclusive Buyer Representation Agreement?

No.  The cooperating broker could act as a designated client representative or a transaction facilitator, if desired.  The contract can be exclusive or non-exclusive.  The term can be for a day or a specific property or can remain in effect for months. 

Is a listing broker required to sign a contract with a buyer before showing the property?

No.  According to the National Association of REALTORS®, a listing broker who is already working with a seller is not required to a sign a contract with a buyer.

What would the settlement agreement require a buyer contract to include?

• It must “conspicuously disclose” the amount or rate of compensation and how it will be determined.
• Compensation cannot be open-ended compensation, such as “whatever the listing broker or seller is willing to pay.”
• A buyer contract cannot describe services as “free” unless the cooperating broker will receive zero compensation from anyone.
• A cooperating broker cannot receive compensation that is more than the amount or rate of compensation in the buyer agreement. If a seller or listing broker offers an incentive or other compensation that is more than your agreed compensation, amend the buyer contract to make sure that the buyer authorizes you to receive more money.
• Must include “conspicuous” language that compensation is not set by law and is fully negotiable.  (This does not mean that you’re required to reduce your compensation or you or your broker prefers not to do so. The intent is to make it clear that there is no standard compensation.)

Does Rhode Island law include any additional requirements for a buyer contract?

Yes. Additional requirements apply if a seller, buyer, landlord or tenant and the principal broker decide to sign a client representation contract.  These requirements do not apply to a contract involving a transaction facilitator.

R.I.G.L. § 5-20.6-10 requires that the agreement: 

• Be an express, written contract;
• Include terms of compensation;
• Describe all services and limitations on services to be performed by the principal broker and his or her affiliated licensees;
• State that a principal broker may appoint one or more affiliated licensees to act as the designated client representative(s) for a seller or landlord and one or more affiliated licensees to act as the designated client representative(s) for a buyer or tenant in the same transaction after a licensee has obtained consent from the client being represented; and
• Be signed by all parties.

For more information, contact the RIAR Legal Department at 401-432-6945 or email [email protected].