Renter / Tenant FAQ

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WORKING WITH REAL ESTATE AGENTS (LEASE TRANSACTIONS)
NOTE. This form is designed for use by agents working with landlords and/or tenants. It is similar, but
not identical, to the “Working with Real Estate Agents” brochure published by the NC Real Estate
Commission (available in letter-length format as NCAR Standard Form #520), which must be used by
agents working with sellers and/or buyers.
When leasing real estate, you may find it helpful to have a real estate agent assist you. Real estate agents
can provide many useful services and work with you in different ways. In some real estate transactions,
the agents work for the landlord. In others, the landlord and tenant may each have agents. And sometimes
the same agents work for both the landlord and the tenant. It is important for you to know whether an
agent is working for you as your agent or simply working with you while acting as an agent of the other
party.
This brochure addresses the various types of working relationships that may be available to you. It should
help you decide which relationship you want to have with a real estate agent. It will also give you useful
information about the various services real estate agents can provide landlords and tenants, and it will
help explain how real estate agents are paid.
LANDLORDS
Landlord’s Agent
If you are leasing real estate as a landlord, you may want to “list” your property for lease with a real estate
firm. If so, you will sign a “listing agreement” authorizing the firm and its agents to represent you in your
dealings with tenants as your landlord’s agent. You may also be asked to allow agents from other firms to
help find a tenant for your property.
Be sure to read and understand the listing agreement before you sign it.
Duties to Landlord: The listing firm and its agents must • promote your best interests • be loyal to you •
follow your lawful instructions
• provide you with all material facts that could influence your decisions • use reasonable skill, care and
diligence, and • account for all monies they handle for you. Once you have signed the listing agreement,
the firm and its agents may not give any confidential information about you to prospective tenants or their
agents without your permission so long as they represent you. But until you sign the listing agreement,
you should avoid telling the listing agent anything you would not want a tenant to know.
Services and Compensation: To help you lease your property, the listing firm and its agents will offer to
perform a number of services for you. These may include • helping you price your property • advertising
and marketing your property • giving you all required property disclosure forms for you to complete •
negotiating for you the best possible price and terms • reviewing all written offers with you and •
otherwise promoting your interests.
For representing you and helping you lease your property, you will pay the listing firm a commission or
fee. The listing agreement must state the amount or method for determining the commission or fee and
whether you will allow the firm to share its commission with agents representing the tenant.
Dual Agent
You may even permit the listing firm and its agents to represent you and a tenant at the same time. This
“dual agency relationship” is most likely to happen if an agent with your listing firm is working as a
tenant’s agent with someone who wants to lease your property. If this occurs and you have not already
agreed to a dual agency relationship in your listing agreement, your listing agent will ask you to sign a
separate agreement or document permitting the agent to act as agent for both you and the tenant.
It may be difficult for a dual agent to advance the interests of both the tenant and landlord. Nevertheless,
a dual agent must treat tenants and landlords fairly and equally. Although the dual agent owes them the Tenant(s) ____ ____ ____ Landlord(s) ____ ____
same duties, tenants and landlords can prohibit dual agents from divulging certain confidential
information about them to the other party
If you choose the “dual agency” option, remember that since a dual agent’s loyalty is divided between
parties with competing interests, it is especially important that you have a clear understanding of • what
your relationship is with the dual agent and • what the agent will be doing for you in the transaction.
TENANTS
When leasing real estate as a tenant, you may have several choices as to how you want a real estate firm
and its agents to work with you. For example, you may want them to represent only you (as a tenant’s
agent). You may be willing for them to represent both you and the landlord at the same time (as a dual
agent ). Or you may agree to let them represent only the landlord (landlord’s agent or subagent). Some
agents will offer you a choice of these services. Others may not
.
Tenant’s Agent
Duties to Tenant: If the real estate firm and its agents represent you, they must • promote your best
interests • be loyal to you • follow your lawful instructions • provide you with all material facts that could
influence your decisions • use reasonable skill, care and diligence, and • account for all monies they
handle for you. Once you have agreed (either orally or in writing) for the firm and its agents to be your
tenant’s agent , they may not give any confidential information about you to landlords or their agents
without your permission so long as they represent you. But until you make this agreement with your
tenant’s agent, you should avoid telling the agent anything you would not want a landlord to know.
Unwritten Agreements: To make sure that you and the real estate firm have a clear understanding of what
your relationship will be and what the firm will do for you, you may want to have a written agreement.
However, some firms may be willing to represent you and assist you for a time as a tenant’s agent without
a written agreement. But if you decide to make an offer to lease a particular property, the agent must
obtain a written agency agreement. If you do not sign it, the agent can no longer represent and assist you
and is no longer required to keep information about you confidential. Furthermore, if you later lease the
property through an agent with another firm, the agent who first showed you the property may seek
compensation from the other firm.
Be sure to read and understand the agency agreement before you sign it.
Services and Compensation: A tenant’s agent will perform a number of services for you. These may
include helping you • find a suitable property • arrange financing • learn more about the property •
prepare and submit a written offer to the landlord and • otherwise promote your best interests. A tenant’s
agent can be compensated in different ways. For example, you can pay the agent out of your own pocket.
Or the agent may seek compensation from the landlord or listing agent first, but require you to pay if the
listing agent refuses. Whatever the case, be sure your compensation arrangement with your tenant’s agent
is spelled out in a tenant agency agreement before you make an offer to purchase property and that you
carefully read and understand the compensation provision.
Dual Agent
You may permit an agent or firm to represent you and the landlord at the same time. This “dual agency
relationship” is most likely to happen if you become interested in a property listed with your tenant’s
agent or the agent’s firm. If this occurs and you have not already agreed to a dual agency relationship in
your tenant agency agreement, your tenant’s agent will ask you to sign a separate agreement or document
permitting him or her to act as agent for both you and the landlord. It may be difficult for a dual agent to
advance the interests of both the tenant and landlord. Nevertheless, a dual agent must treat tenants and
landlords fairly and equally. Although the dual agent owes them the same duties, tenants and landlords
can prohibit dual agents from divulging certain confidential information about them to the other party. Tenant(s) ____ ____ ____ Landlord(s) ____ ____
If you choose the “dual agency” option, remember that since a dual agent’s loyalty is divided between
parties with competing interests, it is especially important that you have a clear understanding of • what
your relationship is with the dual agent and • what the agent will be doing for you in the transaction. This
can best be accomplished by putting the agreement in writing at the earliest possible time.
Landlord’s Agent Working With a Tenant
If the real estate agent or firm that you contact does not offer tenant agency or you do not want them to
act as your tenant’s agent, you can still work with the firm and its agents. However, they will be acting as
the landlord’s agent (or “subagent”). The agent can still help you find and lease property and provide
many of the same services as a tenant’s agent. The agent must be fair with you and provide you with any
“material facts” (such as a leaky roof) about properties.
But remember, the agent represents the landlord – not you – and therefore must try to obtain for the
landlord the best possible price and terms for the landlord’s property. Furthermore, a landlord’s agent is
required to give the landlord any information about you (even personal, financial or confidential
information) that would help the landlord in the lease of his or her property. Agents must tell you in
writing if they are landlords’ agents before you say anything that can help the landlord. But until you are
sure that an agent is not a landlord’s agent, you should avoid saying anything you do not want a
landlord to know.
Landlords’ agents are compensated by the landlords.