- Real Estate
Real Estate Contracts Can Be Valid Even if Dual Agency Forms Are Omitted
The Intent of the Parties Can Control Whether a Contract is Binding
A missing dual agency consent form in a real estate deal does not invalidate the contract if it still contains the essential elements of an agreement, A Connecticut court ruled recently.
Similar issues have arisen in other states when real estate agents try to act for both the buyer and the seller in the same transaction, thereby making them dual agents.
The agents are required to get the consent of the buyers and sellers in writing on a single form.
In some cases, the lack of a consent form can invalidate a real estate contract and lead to fines and other sanctions for the real estate agents.
Courts and arbitrators traditionally handle dual agency issues on a case-by-case basis, rather than instituting a single rule on when the lack of an informed consent form on contracts between buyers and sellers kills a deal.
Disputes such as the Connecticut case, where a dual agency consent form was not attached to the real estate agreement, are instructive for other states. The consent form is required by law to be attached to the contract.
The buyers and sellers were represented by different agents within the same real estate firm. Two days after the contract was signed, the sellers tried to repudiate it. The buyers sued for specific performance to force the sale anyway.
In the subsequent lawsuit, the sellers said the contract was unenforceable because a dual agency form was not attached to the agreement. The trial court disagreed.
The contract contained the essential elements to be valid even without the dual agency form, the court said. A court may . . . enforce an agreement if the [essential] missing terms can be ascertained, either from the express terms or by fair implication, the ruling said.
In Bastarache v. Edgerton, the telephone number of the listing and cooperating agents on the contract were the same and came from a single brokerage, indicating the buyers and sellers must have known they were dual agents, the court said. As a result, there was no deceit or fraud that would invalidate the agreement.
The case is Bastarache v. Edgerton, No. FBTCV146045796, 2015 Conn. Super. (Mar. 30, 2015).