CHAPTER 10. REAL ESTATE AGENCY RELATIONSHIPS
IC 25-34.1-10
Chapter 10. Real Estate Agency Relationships
IC 25-34.1-10-0.5
"Agency relationship" defined
Sec. 0.5. As used in this chapter, "agency relationship" means arelationship in which a licensee represents a client in a real estatetransaction.
As added by P.L.130-1999, SEC.3.
IC 25-34.1-10-1
"Broker" defined
Sec. 1. As used in this chapter, "broker" means an individual orentity issued a broker's real estate license by the Indiana real estatecommission.
As added by P.L.128-1994, SEC.6. Amended by P.L.130-1999,SEC.4.
IC 25-34.1-10-2
Repealed
(Repealed by P.L.130-1999, SEC.23.)
IC 25-34.1-10-3
Repealed
(Repealed by P.L.130-1999, SEC.23.)
IC 25-34.1-10-4
Repealed
(Repealed by P.L.130-1999, SEC.23.)
IC 25-34.1-10-5
"Client" defined
Sec. 5. As used in this chapter, "client" means a person who hasentered into an agency relationship with a licensee.
As added by P.L.128-1994, SEC.6. Amended by P.L.130-1999,SEC.5.
IC 25-34.1-10-6
"Customer" defined
Sec. 6. As used in this chapter, "customer" means a person whois provided services in the ordinary course of business by a licenseebut who is not a client.
As added by P.L.128-1994, SEC.6. Amended by P.L.130-1999,SEC.6.
IC 25-34.1-10-6.5
"In-house agency relationship" defined
Sec. 6.5. As used in this chapter, "in-house agency relationship"means an agency relationship involving two (2) or more clients whoare represented by different licensees within the same real estate
firm.
As added by P.L.130-1999, SEC.7.
IC 25-34.1-10-6.8
"Licensee" defined
Sec. 6.8. As used in this chapter, "licensee" means an individualor entity issued a salesperson's or broker's real estate license by theIndiana real estate commission.
As added by P.L.130-1999, SEC.8.
IC 25-34.1-10-7
"Limited agent" defined
Sec. 7. As used in this chapter, "limited agent" means a licenseewho, with the written and informed consent of all parties to a realestate transaction, represents both the seller and buyer or both thelandlord and tenant and whose duties and responsibilities to a clientare only those set forth in this chapter.
As added by P.L.128-1994, SEC.6. Amended by P.L.130-1999,SEC.9.
IC 25-34.1-10-7.5
"Managing broker" defined
Sec. 7.5. As used in this chapter, "managing broker" means abroker who manages a branch office or who acts on behalf of aprincipal broker.
As added by P.L.130-1999, SEC.10.
IC 25-34.1-10-7.8
"Principal broker" defined
Sec. 7.8. As used in this chapter, "principal broker" means theindividual broker (including the broker designated or representativeof a partnership, corporation, or limited liability company) whom theIndiana real estate commission shall hold responsible for the actionsof licensees who are affiliated with the individual broker.
As added by P.L.130-1999, SEC.11.
IC 25-34.1-10-8
"Real estate transaction" defined
Sec. 8. As used in this chapter, "real estate transaction" means thesale or lease of any legal or equitable interest in real estate.
As added by P.L.128-1994, SEC.6.
IC 25-34.1-10-9
"Subagent" defined
Sec. 9. As used in this chapter, "subagent" means a brokerengaged to act for another broker in performing brokerage servicesfor a client.
As added by P.L.128-1994, SEC.6. Amended by P.L.130-1999,SEC.12.
IC 25-34.1-10-9.5
Agency relationship; performance of duties
Sec. 9.5. (a) A licensee has an agency relationship with, and isrepresenting, the individual with whom the licensee is workingunless:
(1) there is a written agreement to the contrary; or
(2) the licensee is merely assisting the individual as a customerwithout compensation.
(b) If a licensee, under subsection (a)(1), does not have an agencyrelationship with the individual with whom the licensee is workingdue to the existence of a written agreement to the contrary, thelicensee must perform at least the following duties under the writtenagreement:
(1) Be available to receive and timely present offers andcounteroffers for the purchase or lease of:
(A) the property of the individual, if the individual is a selleror landlord; or
(B) the property that the individual seeks to purchase orlease, if the individual is a buyer or tenant.
(2) Assist in negotiating, completing real estate forms,communicating, and timely presenting offers, counteroffers,notices, and various addenda relating to the offers andcounteroffers until:
(A) a purchase agreement or lease is signed; and
(B) all contingencies are satisfied or waived.
(3) Timely respond to questions relating to offers, counteroffers, notices, various addenda, and contingencies from theseller, landlord, buyer, or tenant pertaining to the subjectproperty.
(c) If:
(1) a licensee described in subsection (b) fails to perform theduties set forth in subsection (b); and
(2) another licensee performs those duties on behalf of or at therequest of a seller, landlord, buyer, or tenant;
the performance of those duties by the other licensee referred to insubdivision (2) does not constitute an agency relationship.
(d) This section does not prohibit a licensee from performingduties in addition to the duties specified in this section on behalf ofor at the request of a seller, landlord, buyer, or tenant in a real estatetransaction.
As added by P.L.130-1999, SEC.13. Amended by P.L.87-2006,SEC.8.
IC 25-34.1-10-10
Licensee representing seller or landlord; duties; disclosure ofinformation
Sec. 10. (a) A licensee representing a seller or landlord has thefollowing duties and obligations:
(1) To fulfill the terms of the agency relationship made with theseller or landlord. (2) To disclose the nature of the agency relationship with theseller or landlord, and redefine and disclose if the relationshipchanges.
(3) To promote the interests of the seller or landlord by:
(A) seeking a price or lease rate and contract termssatisfactory to the seller or landlord; however, the licenseeis not obligated to seek additional offers to purchase or leaseafter an offer to purchase or lease has been accepted by theseller or landlord, unless otherwise agreed between theparties;
(B) presenting all offers to purchase or lease to and from theseller or landlord immediately upon receipt of the offersregardless of whether an offer to purchase or lease has beenaccepted, unless otherwise directed by the seller or landlord;
(C) disclosing to the seller or landlord adverse material factsor risks actually known by the licensee concerning the realestate transaction;
(D) advising the seller or landlord to obtain expert adviceconcerning material matters that are beyond the licensee'sexpertise;
(E) timely accounting for all money and property receivedfrom the seller or landlord;
(F) exercising reasonable care and skill; and
(G) complying with the requirements of this chapter and allapplicable federal, state, and local laws, rules, andregulations, including fair housing and civil rights statutes,rules, and regulations.
(b) A licensee representing a seller or landlord may not disclosethe following without the informed written consent of the seller orlandlord:
(1) That a seller or landlord will accept less than the listed priceor lease rate for the property or other contract concessions.
(2) What motivates the seller to sell or landlord to lease theproperty.
(3) Any material or confidential information about the seller orlandlord unless the disclosure is required by law or wherefailure to disclose would constitute fraud or dishonest dealing.
(c) A licensee representing a seller or landlord owes no duties orobligations to the buyer or tenant except that a licensee shall treat allprospective buyers or tenants honestly and shall not knowingly givethem false information.
(d) A licensee shall disclose to a prospective buyer or tenantadverse material facts or risks actually known by the licenseeconcerning the physical condition of the property and facts requiredby statute or regulation to be disclosed and that could not bediscovered by a reasonable and timely inspection of the property bythe buyer or tenant. A licensee representing a seller or landlord owesno duty to conduct an independent inspection of the property for thebuyer or tenant or to verify the accuracy of any statement, written ororal, made by the seller, the landlord, or an independent inspector.
This subsection does not limit the obligation of a prospective buyeror tenant to obtain an independent inspection of the physicalcondition of the property. A cause of action does not arise against alicensee for disclosing information in compliance with this section.
(e) A licensee representing a seller or landlord may:
(1) show alternative properties not owned by the seller orlandlord to a prospective buyer or tenant and may listcompeting properties for sale or lease without breaching anyduty or obligation to the seller or landlord; and
(2) provide to a buyer or tenant services in the ordinary courseof a real estate transaction and any similar services that do notviolate the terms of the agency relationship made with the selleror landlord.
As added by P.L.128-1994, SEC.6. Amended by P.L.130-1999,SEC.14.
IC 25-34.1-10-11
Licensee representing buyer or tenant; duties; disclosure ofinformation
Sec. 11. (a) A licensee representing a buyer or tenant has thefollowing duties and obligations:
(1) To fulfill the terms of the agency relationship made with thebuyer or tenant.
(2) To disclose the nature of the agency relationship with thebuyer or tenant, and redefine and disclose if the relationshipchanges.
(3) To promote the interests of the buyer or tenant by:
(A) seeking a property with a price or lease rate and contractterms satisfactory to the buyer or tenant; however, thelicensee is not obligated to locate other properties topurchase or lease while the buyer is under contract to buyproperty or while the tenant is under contract to leaseproperty, unless otherwise agreed between the parties;
(B) presenting all offers to purchase and lease to and fromthe buyer or tenant immediately upon receipt of an offerregardless of whether the buyer is already under contract tobuy or the tenant is under contract to lease property, unlessotherwise directed by the buyer or tenant;
(C) disclosing to the buyer or tenant adverse material factsor risks actually known by the licensee concerning the realestate transaction;
(D) advising the buyer or tenant to obtain expert adviceconcerning material matters that are beyond the licensee'sexpertise;
(E) timely accounting for all money and property receivedfrom the buyer or tenant;
(F) exercising reasonable care and skill; and
(G) complying with the requirements of this chapter and allapplicable federal, state, and local laws, rules, andregulations, including fair housing and civil rights statutes,
rules, and regulations.
(b) A licensee representing a buyer or tenant shall not disclose thefollowing without the informed consent, in writing, of the buyer ortenant:
(1) That a buyer or tenant will pay more than the offeredpurchase price or offered lease rate for the property or othercontract concessions.
(2) What motivates the buyer to buy or tenant to lease theproperty.
(3) Any material or confidential information about the buyer ortenant unless this disclosure is required by law or where failureto disclose would constitute fraud or dishonest dealing.
(c) A licensee representing a buyer or tenant owes no duties orobligations to the seller or landlord except that a licensee shall treatall prospective sellers or landlords honestly and not knowingly givethem false information.
(d) A licensee representing a buyer or tenant owes no duty toconduct an independent investigation of the buyer's or tenant'sfinancial ability to perform for the benefit of the seller or landlord orto verify the accuracy of any statement, written or oral, made by thebuyer, the tenant, or a third party.
(e) A licensee representing a buyer or tenant may:
(1) show properties in which the buyer or tenant is interested toother prospective buyers or tenants and may show competingbuyers or tenants the same property or assist other buyers ortenants in purchasing or leasing a particular property withoutbreaching any duty or obligation to the buyer or tenant; and
(2) provide to a seller or landlord services in the ordinarycourse of a real estate transaction and any similar services thatdo not violate the terms of the agency relationship made withthe buyer or tenant.
As added by P.L.128-1994, SEC.6. Amended by P.L.130-1999,SEC.15.
IC 25-34.1-10-12
Licensee acting as limited agent
Sec. 12. (a) A licensee may act as a limited agent only with thewritten consent of all parties to a real estate transaction. The writtenconsent is presumed to have been given and all parties are consideredinformed for any party who signs a writing or writings at the time ofentering into an agency relationship with the licensee that containsthe following:
(1) A description of the real estate transaction or types of realestate transactions in which the licensee will serve as a limitedagent.
(2) A statement that in serving as a limited agent, the licenseerepresents parties whose interests are different or even adverse.
(3) A statement that a limited agent shall not disclose thefollowing without the informed consent, in writing, of theparties to the real estate transaction: (A) Any material or confidential information, except adversematerial facts or risks actually known by the licenseeconcerning the physical condition of the property and factsrequired by statute, rule, or regulation to be disclosed andthat could not be discovered by a reasonable and timelyinspection of the property by the parties.
(B) That a buyer or tenant will pay more than the offeredpurchase price or offered lease rate for the property.
(C) That a seller or landlord will accept less than the listedprice or lease rate for the property.
(D) What motivates a party to buy, sell, or lease theproperty.
(E) Other terms that would create a contractual advantagefor one (1) party over another party.
(4) A statement that there will be no imputation of knowledgeor information between any party and the limited agent oramong licensees.
(5) A statement that a party does not have to consent to thelimited agency.
(6) A statement that the consent of each party has been givenvoluntarily and that any limited agency disclosure has been readand understood.
(b) A licensee acting as a limited agent may disclose and provideto both the seller and buyer property information, including listedand sold properties available through a multiple listing service orother information source.
(c) A cause of action does not arise against a licensee fordisclosing or failing to disclose information in compliance with thissection, and the limited agent does not terminate the limited agencyrelationship by making a required disclosure.
As added by P.L.128-1994, SEC.6. Amended by P.L.130-1999,SEC.16.
IC 25-34.1-10-12.5
Representations by licensees
Sec. 12.5. (a) An individual licensee affiliated with a principalbroker represents only the client with which the licensee is workingin an in-house agency relationship. A client represented by anindividual licensee affiliated with a principal broker is representedonly by that licensee to the exclusion of all other licensees. Aprincipal or managing broker does not represent any party in suchtransactions unless the principal or managing broker has an agencyrelationship to personally represent a client.
(b) A licensee who personally represents both the seller and buyeror both the landlord and tenant in a real estate transaction is a limitedagent and is required to comply with the provisions of this chaptergoverning limited agents.
(c) A licensee representing a client in an in-house agencyrelationship owes the client duties and obligations set forth in thischapter and shall not disclose material or confidential information
obtained from the client to other licensees, except to the principal ormanaging broker for the purpose of seeking advice or assistance forthe client's benefit.
(d) A principal broker, managing broker, and any affiliatedlicensee shall take reasonable and necessary care to protect anymaterial or confidential information disclosed by a client to theclient's in-house agent.
(e) In all in-house agency relationships, a principal broker,managing broker, and an individual licensee possess only actualknowledge and information. There is no imputation of agency,knowledge, or information among or between clients, the principalbroker, the managing broker, and licensees.
As added by P.L.130-1999, SEC.17.
IC 25-34.1-10-13
Written office policy regarding agency relationships; disclosure ofpolicy; disclosure of compensation; compensation not creatingagency relationship
Sec. 13. (a) A principal broker shall develop and enforce a writtenoffice policy that identifies and describes the agency relationshipsthat a licensee may have with a seller, landlord, buyer, or tenant andthat specifically permits or rejects the practice of disclosed limitedagency.
(b) At the beginning of an agency relationship, a licensee shalldisclose in writing the principal broker's written office policy setforth in this section before the disclosure by the potential seller,landlord, buyer, or tenant of any confidential information specific tothat potential seller, landlord, buyer, or tenant.
(c) Parties to a real estate transaction shall be advised whethercompensation will be shared with other principal brokers who mayrepresent other parties to the transaction whose interests are differentor even adverse.
(d) The payment of compensation does not create an agencyrelationship between a licensee and a seller, landlord, buyer, ortenant.
As added by P.L.128-1994, SEC.6. Amended by P.L.130-1999,SEC.18.
IC 25-34.1-10-14
Commencement and termination of agency relationship
Sec. 14. (a) The duties and obligations set forth in this chapterbegin at the time the licensee enters into an agency relationship witha party to a real estate transaction and continues until the agencyrelationship terminates.
(b) If the agency relationship is not fulfilled or completed for anyreason, the agency relationship ends at the earlier of:
(1) a date of expiration agreed upon by the parties; or
(2) a termination of the relationship by the parties.
(c) Except as otherwise agreed to in writing and as provided insubsection (b), a licensee representing a seller, landlord, buyer, or
tenant owes no further duties or obligations after termination,expiration, or completion of the agency relationship, except:
(1) accounting for all money and property received during theagency relationship; and
(2) keeping confidential all information received during thecourse of the agency relationship that was made confidential byrequest or instructions from the client, unless:
(A) the disclosure is required by law;
(B) the client gives written consent to the disclosure; or
(C) the information becomes public from a source other thanthe licensee or by subsequent words or conduct of the client.
As added by P.L.128-1994, SEC.6. Amended by P.L.130-1999,SEC.19.
IC 25-34.1-10-15
Fiduciary duties superseded
Sec. 15. The duties and obligations of a licensee set forth in thischapter supersede any fiduciary duties of a licensee to a party basedon common law principles of agency to the extent that those commonlaw fiduciary duties are inconsistent with the duties and obligationsset forth in this chapter.
As added by P.L.128-1994, SEC.6. Amended by P.L.130-1999,SEC.20.
IC 25-34.1-10-16
Liability for misrepresentation
Sec. 16. (a) A client is not liable for any misrepresentation madeby a licensee in connection with the agency relationship, unless theclient knew or should have known of the misrepresentation.
(b) A licensee is not liable for any misrepresentation made byanother licensee, unless the licensee knew or should have known ofthe other licensee's misrepresentation.
As added by P.L.128-1994, SEC.6. Amended by P.L.130-1999,SEC.21.
IC 25-34.1-10-17
Subagency prohibited
Sec. 17. A licensee may not make an offer of subagency througha multiple listing service or other information source, or agree toappoint, cooperate with, compensate, or otherwise associate with asubagent in a real estate transaction. The elimination of subagencyby this section is not intended to limit the rights of a licensee tocooperate with, compensate, or otherwise associate with anotherlicensee who is not acting on behalf of a client.
As added by P.L.130-1999, SEC.22.