Last Updated on February 7, 2024 by Mack Barnes
This blog post is designed to provide a clear and concise overview of a key aspect of the Oklahoma real estate landscape as outlined in the Oklahoma Real Estate License Code. We will focus on the specific sections 858-351 to 858-363 of the OREC Code and Rules, bringing to light the unique framework of brokerage relationships within the state. Whether you’re a real estate professional or someone interested in the Oklahoma property market, this overview aims to enhance your understanding of these important regulations.
For the most comprehensive and detailed information, we encourage our readers to directly reference the OREC Code and Rules. While we are committed to providing accurate and authoritative content, remember that this blog post is not a substitute for professional legal advice. Now, let’s dive into the intricacies of brokerage relationships in Oklahoma, a topic that stands out for its distinctive approach compared to the traditional real estate models.
- Definitions (§858-351):
- Broker: A real estate broker, broker associate, sales associate, or provisional sales associate authorized to provide brokerage services.
- Brokerage Services: Services a broker provides to a party in a transaction.
- Party: A seller, buyer, landlord, tenant, or someone involved in an option or exchange.
- Transaction: Activities or processes to buy, sell, lease, rent, option, or exchange real estate.
- Broker Duties and Responsibilities (§858-353):
- Brokers must treat all parties with honesty and exercise reasonable skill and care.
- Duties include receiving and presenting offers and counteroffers, accounting for money and property, and keeping certain information confidential (e.g., willingness to pay more or accept less, financing terms, motivating factors).
- Brokers must inform parties of their expected costs and keep them informed about the transaction.
- These duties are mandatory and cannot be waived by a broker.
- Brokerage Services to Both Parties in a Transaction (§858-355.1):
- Brokerage agreements must incorporate the broker’s duties and responsibilities.
- Brokers shall clearly describe and disclose in writing their duties and responsibilities to all parties involved before they sign a contract related to the sale, purchase, lease, option, or exchange of real estate.
- Brokers may provide services to both parties in a transaction but must disclose their role and responsibilities to both parties.
- If a broker provides fewer services than required for a transaction, they must disclose this to their client.
- Disclosure of Limited Services:
- The broker must provide a written disclosure to their client (the party they are representing) outlining the specific services they will not be providing. This means the broker needs to clearly list out the steps or aspects of the transaction that they will not handle or assist with.
- Clarification on Assistance from the Other Party’s Broker:
- The disclosure must also explicitly state that the broker representing the other party in the transaction is not obligated to assist with the steps that the first broker has chosen not to provide. This is a crucial aspect because it sets clear expectations for the client.
- Disclosure of Limited Services:
- Disclosures and Confirmations (§858-356):
- Written disclosures must be confirmed by each party in a separate provision attached to the real estate contract.
- Post-Transaction Duties (§858-358):
- After a transaction is completed, the broker’s duties include accounting for all related monies and property and maintaining confidentiality of certain information.
- Broker Compensation and Relationship (§858-359):
- Payment to a broker does not determine the relationship established between the broker and a party.
- Brokers may receive fees based on selling prices or lease costs without breaching duty to any party.
- Legal and Ethical Framework (§858-360 to §858-363):
- The code supersedes common law principles of agency, establishing specific duties for brokers.
- Brokers may cooperate with other brokers but cannot act as agents or subagents.
- a party to a real estate transaction is not vicariously liable for the actions or omissions of a real estate licensee providing brokerage services. This means that clients, such as buyers or sellers, are not held responsible for the mistakes or wrongful actions of their real estate brokers or agents.
- Broker associates must work under a real estate broker and cannot enter into brokerage agreements independently.
This framework ensures that real estate transactions in Oklahoma are conducted ethically and legally, safeguarding the interests of all parties involved.