Touring Agreement Legislation – House Bill 1684 / Senate Bill 1309

The General Assembly is currently in the process of making a big change in the duties of real estate licensees in general, requiring an agreement before even showing a property. The bills are House Bill 1684 and Senate Bill 1309. To give you a sense of where this stands, this bill passed the Senate with no opposition, and it currently (as of this writing) sits in the House where it has been referred to the Committee on General Laws.

This is an impactful change, as I am sure you are all aware, because currently there is an exception where a licensee does not need to have an agreement in place before showing a house. So, we wanted to keep you updated and informed if and when this change does come down in July.

Now what’s in the bill?

Please Note: The impact of the bill is after the details below.

There are changes to the definitions under § 54.1-2130. Definitions

Modified: “Brokerage relationship” means the contractual relationship between a client and a real estate licensee who has been engaged by such client for the purpose of procuring a seller, buyer, option, tenant, or landlord ready, able, and willing to sell, buy, option, exchange or rent real estate on behalf of a client toprovide brokerage services.

Added: “Brokerage services” means (i) those activities described in subsection A of § 54.1-2131, subsection A of § 54.1-2132, subsection A of § 54.1-2133, and subsection A of § 54.1-2134; (ii) activities requiring the exercise of a licensee’s professional judgment, discretion, advice, or counsel; or (iii) activities otherwise performed in connection with procuring a seller, buyer, option, tenant, or landlord ready, able, and willing to sell, buy, option, exchange, or rent real estate on behalf of the client with whom the licensee has an executed brokerage agreement.

Added: “Showing property” means (i) taking a prospective buyer or tenant to a property, obtaining access to such property, and taking the individual through the property, including entering a property to provide a live, virtual tour to a prospective buyer or tenant who is not physically present; (ii) responding to questions or providing information about such property that is not of public record while at the property; or (iii) otherwise providing brokerage services while at the property.

For buyers/tenant agents there are changes under § 54.1-2132 Licensees engaged by buyers, § 54.1-2134 Licensees engaged by tenants:

• 54.1-2132 Licensees engaged by buyers

Added: 1. Enter into a brokerage agreement with the prospective buyer prior to showing property to such prospective buyer;

Removed: G. Notwithstanding any other provision of law requiring written brokerage agreements or governing the duties of licensees, nothing in this chapter shall be construed to require that a written agreement between a licensee and a prospective buyer be executed prior to the licensee’s showing properties to the prospective buyer.

54.1-2134 Licensees engaged by tenants

Added: 1. Enter into a brokerage agreement with the prospective tenant prior to showing property to such prospective tenant;

Removed: F. Notwithstanding any other provision of law requiring written brokerage agreements or governing the duties of licensees, nothing in this chapter shall be construed to require that a written agreement between a licensee and a prospective tenant be executed prior to the licensee’s showing properties to the prospective tenant.

For sellers/property managers there are changes under § 54.1-2131 Licensees engaged by sellers, § 54.1-2133 Licensees engaged by landlords to lease property.

• 54.1-2131 Licensees engaged by sellers

Added: G. A licensee engaged by a seller shall not be required to enter into a brokerage agreement with a prospective buyer to show property to the prospective buyer when such showing is conducted pursuant to and in accordance with a brokerage agreement entered into with a seller client.

54.1-2133 Licensees engaged by landlords to lease property

Added: F. A licensee engaged by a landlord shall not be required to enter into a brokerage agreement with a prospective tenant to show property to the prospective tenant when such showing is conducted pursuant to and in accordance with a brokerage agreement entered into with a landlord client.

And finally, the last change is under § 54.1-2137. Commencement and termination of brokerage relationships; brokerage agreements required.

Added: B. Except as otherwise provided in this article, a licensee shall enter into a brokerage agreement with a prospective client prior to providing brokerage services. A licensee shall not be required to enter into a brokerage agreement prior to preparing property-specific materials with the intent to obtain a brokerage relationship with a prospective client.

For your convenience the link to the bill is here: https://lis.virginia.gov/bill-details/20251/SB1309 .

The Impact

In short, a buyer and a tenant must now have a written agreement in place with their agent before the agent can show them a property. The seller’s agent or property manager do not need an agreement when they are showing a property to a buyer and tenant if they solely represent the seller or landlord. The exception of not requiring an agreement to show a property will be removed. Lastly, preparing property specific materials so that you may get the client does not require an agreement.

This change in the law does not in any way impact what must be in the written agreement from what currently exists. This law does not force you to enter into a specific type of agreement, i.e. standard agency, limited agency, exclusive, non-exclusive, etc. The law also does not force you to enter any prescribed term that you and your client haven’t agreed to, i.e. a day, a week, a month, etc.  The only change this law would create is that you must have a written agreement before showing a property if you are a buyer’s agent or tenant’s agent.

If you have any questions as to this change please speak with your broker and remember that the Virginia REALTORS^® Legal Hotline is open to all members.