OHIO REALTORS: Clarification received from the Division on unauthorized access to property
By Peg Ritenour, Ohio REALTORS Vice President of Legal Services/Administration
On Nov. 26, Anne M. Petit, Superintendent of the Ohio Division of Real Estate, and Tre’ Giller, President of the Ohio Real Estate Commission, issued a warning to all principal brokers about unauthorized access being given to “unlicensed and/or unsupervised individuals.” Such conduct has been found by the Real Estate Commission to violate Ohio license law and the Commission is seeing an increase in the disciplinary cases involving such conduct.
Almost immediately the Ohio REALTORS Legal Assistance Hotline was inundated with calls from brokers, local Boards and MLSs seeking further guidance on this issue. While most brokers understand that buyers should never be permitted to enter a property without an agent present, many concerns were raised about how the Commission’s warning applied to inspectors, appraisers, contractors, REO properties and property management. Following a series of questions posed to the Superintendent and her counsel, she responded with clarification from the Ohio Real Estate Commission on several points. Below are the answers to those questions, as well as a few others we have received:
Q: Is the seller’s permission required to allow an appraiser, inspector, contractor, or buyer in the property without an agent present?
A: Yes. According to the Division the signed, written consent of the seller is necessary for any person who is not licensed as a real estate broker or salesperson to be in the property without a licensee present.
Q: Many inspectors and appraisers are affiliate members of the Board of REALTORS/MLS and have lock box privileges. Because the seller agreed to have a lock box placed on his property, does that written consent to utilize a lockbox allow the affiliate inspector or appraiser who has lock box privileges to enter the property without the agent present?
A: Per the Division, even though the appraiser or inspector participates in a lock box system, separate written consent from the seller is necessary. The OREC wants to assure that the seller provides informed consent — meaning that they understand and agree that the inspector or appraiser will be in the property without a real estate licensee present.
Q: So the Division is saying that I need to have specific written approval from the seller for the appraiser, inspector or anyone else to be in the property without a real estate agent or broker?
Q: Do I need to create a consent form for the seller to sign?
A: No. While you may want to do that, the OREC is not specifically requiring a “form.”
Q: Our listing contract has a paragraph in which the seller consents to a lock box being placed on his property. Is that sufficient?
A: That depends on the specific language that is included in your listing. According to the Division, the listing contract language would need to clearly authorize unlicensed persons to access that property without the listing agent or other licensee present.
If brokers or local Boards want to include such a clause in a listing agreement, it is our recommendation that such language be very specific as to the individuals that can be given such unsupervised access and require notice to the seller when such individuals will be entering the property. For example, the language may want to limit such access to only licensed appraisers or inspectors with lock box privileges via the MLS system and state that this access will only be granted with notice to the seller as to the date and time of the appointment. In addition, “hold harmless” language should be included to protect the listing agent/brokerage from any liability.
Q: Could the seller’s consent could be in the form of an email or text message between the licensee and the owner in which the owner indicates that he understands and OKs the appraiser, inspector, etc. being in his property without the licensee present?
A: Yes, however it is important to retain a copy of the entire email or text thread that demonstrates that consent was given.
Q: Can the agent let the inspector/appraisal/contractor in the property but then leave?
A: Yes, if the seller gave written, signed permission to be in the property without the licensee present.
Q: If the seller wants the agent present during an inspection, does the agent have to accompany the inspector throughout the property as he/she conducts the inspection? It is usually recommended that agents not do that.
A: The agent does not have to accompany the inspector throughout the property.
Q: Can an agent’s unlicensed personal assistant or a brokerage employee be present during the inspection/appraisal/repair work rather than the agent?
A: Per the Division the written, the informed consent from sellers is necessary to allow anyone unlicensed to access the property without a licensee present. This would include unlicensed assistants or staff.
Q: Does this apply to vacant property? What about commercial property?
Q: Licensees who handle REO properties are frequently responsible for coordinating work to be done on the property to prepare it for showing. In doing so, the listing agent often gives contractors/maintenance/repair workers access to go in and do work on the property and are not present during this work. Is written consent required in this situation as well?
A: Yes. Upfront written consent is necessary. As stated above, that consent may be handled in the listing agreement or some other written form.
Q: If a buyer’s agent has a scheduled showing and something comes up at the last minute, is it OK to send another agent, team member, or licensed assistant in the brokerage to handle the appointment or do they need the specific consent of the listing agent or seller first?
A: If the person taking the buyer’s agent’s place is a licensee with the same brokerage, the listing belongs to the brokerage and another licensee may conduct the showing. However, in response to this question, the OREC stressed that communication is key — the buyer’s agent should notify the listing agent so that the seller can be made aware that a different agent will be showing the home.
Q: With respect to property management and leasing, is it necessary for the property manager to have the landlord’s consent to give a prospective tenant a code or key to enter the unit on their own? What about contractors, maintenance workers, etc.? Assuming written consent is necessary, can that consent be included in the property management agreement or is consent needed for each specific instance?
A: According to the Superintendent, it is fine to include language in the property management agreement that allows prospective tenants or others to enter the rental property without the licensee present. As stated above, it is recommended that the language in the property management agreement be as specific as possible to establish parameters as to who will be given access, under what circumstances and any security measures that will be imposed (i.e. a copy of the driver’s license, etc.). This will assure that the owner is fully informed.
Q: If the property owner gives me written consents is it OK for me to give out a lock box code or key to a prospective buyer or a contractor?
A: That depends! If you are leasing the lock box through your local Board of REALTORS or MLS, your use of that lock box is subject to specific rules regarding its usage. Those rules probably provide that the code or key is for your exclusive use only and prohibit you from giving out the code or key to any one else. Doing so could result in a violation for which fines or other sanctions could be imposed. Thus, in that situation, even with the seller’s consent you would be prohibited by these lock box rules from giving access via the lock box to any other person.
In some instances, though, brokers place their own lock boxes on the property. This is common in property management or in areas where the local Board of REALTORS/MLS doesn’t have a lock box system or the broker chooses not to participate in that system. In that instance, the owner’s written informed consent is all that you need. Brokers who do have their own lock boxes should assure that security measures are put into place so that access via that code or key is limited to only the scheduled, approved appointment. For example, the code should be deactivated after that appointment to preclude a buyer/inspector/contractor/or cooperating agent from using it to access the property without consent at a later date or time.
The bottom line is that sellers have the right to know who is in their property and to control the circumstances under which persons are given access. It doesn’t matter if the property is vacant or going to close in two days. The buyer should never be permitted to enter the premises without a licensed agent unless the owner or listing agent has consented to this. And lock box access can never be given to unauthorized persons. Doing so is a sure way to potentially lose not only your MLS privileges, but also your license.
Legal articles provided in the Ohio REALTORS Buzz are intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.