Signing a Contract

Photo courtesy of Flickr user Frank3.0

This is part three in a four-part series. See parts one (property management) and two (REOs and short sales).

Improper Drafting of Documents. AAR’s Professional Standards Department is receiving a number of complaints about the improper drafting of forms, such as contracts, counteroffers and addenda.

Although not always a main cause of action, improper drafting can be discovered when a complaint is being reviewed. When reviewing forms, consider: Have the forms been properly filled out? Are there initials and/or signatures on all?  Have the documents been reviewed when returned for changes, additions or deletions?  Do you have a copy of all documents for the transaction?  One missing piece, lack of a signature acknowledgement or an altered document that you cannot defend can lead to a violation.

Recently, one complaint involved a REALTOR® drafting a lease purchase.  If the REALTOR® doesn’t understand the transaction, they certainly are not drafting the paperwork correctly to protect the parties they represent.  Which leads to a question for our broker/manager readers: Do you allow your agents to draft lease options or lease purchases?  Have you reviewed your in-house policies for specialties your agents may offer?  Do you have specific training requirements prior to your agents offering such services?

Advertising Complaints. Here are complaints we are seeing charged frequently under Article 12:

  • An MLS picture of a property from the “area” not the actual property with no disclaimer identifying the photo as not the actual site but an area photo
  • Agents making claims that they are #1 in a particular market place or area that are false or misleading
  • A variety of internet issues such as lack of disclosure (not indicating a licensed REALTOR®, not including the office affiliation)

One issue that comes to mind was that of a community with a lake.  The photo indicated the property as a “lake front” offering when in fact, the property was located a good distance from any lake.

Stay tuned for the next installment of this month-long series. On Monday, November 28, we’ll touch on agent-to-agent conflicts and broker communication policies.


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