Pennsylvania law concerning ACT 112 (Consumer Notice)

This is for informational purposes only!

CONSUMER NOTICE

THIS IS NOT A CONTRACT

Pennsylvania Law requires real estate brokers and salespersons (licensees) to advise consumers of the business relationships permitted by the Real Estate Licensing and Registration Act. This notice must be provided to the consumer at the first contact where a substantive discussion about real estate occurs.

Before you disclose any information to a licensee, be advised that unless you select an agency relationship by signing a written agreement providing for such a relationship, the licensee is NOT REPRESENTING YOU. A business relationship of any kind will NOT be presumed but must be established between the consumer and the licensee.

Any licensee who provides you with real estate services owes you the following duties:

Exercise reasonable professional skill and care which meets the practice standards required by the Act.
Deal honestly and in good faith.
Present, in a timely manner, all offers, counteroffers, notices, and communications to and from the parties in writing. The duty to present written offers and counteroffers may be waived if the waiver is in writing.
Comply with Real Estate Seller Disclosure Act.
Account for escrow and deposit funds.
Disclose all conflicts if interests in a timely manner.
Provide assistance with document preparation and advise the consumer regarding compliance with laws pertaining to real estate transactions.
Advise the consumer to seek expert advise on matters about a transaction that are beyond the licensee's expertise.
Keep the consumer informed about the transaction and the tasks to be completed.
Disclose financial interest in a service, such as financial, title transfer and preparation services, insurance, construction, repair or inspection, at the time service is recommended or the first time the licensee learns that the service will be used.

A licensee may have the following business relationships with the consumer:

Seller Agency:
    Seller agency is a relationship where the licensee, upon entering into a written
    agreement, works only for a seller/landlord.

    Seller's agents owe the additional duties of:

Loyalty to the seller/landlord by acting in the seller's/landlord's best interest.
Confidentiality, except that a licensee has a duty to reveal known material defects about the property.
Making a continuous and good faith effort to find a buyer for the property, except while the property is subject to an existing agreement.
Disclosure to other parties in the transaction that the licensee has been engaged as a seller's agent.

A seller's agent may compensate other brokers as subagents if the seller/landlord agrees in writing. Subagents have the same duties and obligations as the seller's agent. Seller's agents may also compensate buyer's agents and transaction licensees who do not have the same duties and obligations as seller's agents.

If you enter into a written agreement, the licensee in the real estate company owe you the additional duties identified above under seller agency. The exception is designated agency section in this notice for more information.

Buy Agency:

Buyer agency is a relationship where the licensee, upon entering into a written
agreement, works only for the buyer/tenant.

Buyer's agents owe the additional duties of:

Loyalty to the buyer/tenant by acting in the buyer's/tenant's best interest.
Confidentiality, except that a licensee has a duty to reveal known material defects about the property.
Making a continuous and good faith effort to find a property for the buyer/tenant, except while the buyer/tenant is subject to an existing agreement.
Disclosure to other parties in the transaction that the licensee has been engaged as a buyer's agent.

A buyer's agent may be paid fees, which may include a percentage of the purchase price, and, even if paid by the seller/landlord, will represent the interests of the buyer/tenant.

If you enter into a written agreement, the licensee in the real estate company owe you the additional duties identified above under buyer agency. The exception is designated agency. See the designated agency section in this notice for more information.

Dual Agency:

     Dual agency is a relationship where the licensee acts as the agent for both the
     seller/landlord and the buyer/tenant in the same transaction with the written
     consent of all parties. Dual agents owe the additional duties of:

Taking no action that is adverse or detrimental to either party's interest in the transaction.
Making a continuous and good faith effort to find a buyer for the property and a property for the buyer, unless either are subject to an existing contract.
Confidentiality, except that a licensee is required to disclose known material defects about the property.

Designated Agency:

In designated agency, the employing broker may, with your consent, designate one or more licensees from the real estate company to represent you. Other licensees in the company may represent another party and shall not be provided with any confidential information. The designated agent(s) shall have the duties as listed above under seller agency and buyer agency.

In designated agency, the employing broker will be a dual agent and have the additional duties of:

Taking reasonable care to protect any confidential information disclosed to the licensee.
Taking responsibility to direct and supervise the business activities of the licensee who represents the seller and buyer while taking no action that is adverse or detrimental to either party's interest in the transaction.

The designation may take place at the time that the parties enter into a written agreement, but may occur at a later time. Regardless of when the designation takes place, the employing broker is responsible for ensuring that confidential information is not disclosed.

Transaction Licensee:

A transaction licensee is a broker or salesperson who provides communication or document preparation services or performs other acts for which a licensee is required WITHOUT being the agent or advocate for either the seller/landlord or the buyer/ tenant. Upon signing a written agreement or disclosure statement, a transaction licensee has the additional duty of limited confidentiality in that the following information may not be disclosed:

The seller/landlord will accept a price less than the asking/listing price.
The buyer/tenant will pay a price greater than the price submitted in a written offer.
The seller/landlord or buyer/tenant will agree to financing terms other than those offered.

Other information deemed confidential by the consumer shall not be provided to the transaction licensee.

OTHER INFORMATION ABOUT REAL ESTATE TRANSACTIONS
The following are negotiable and shall be addressed in an agreement/disclosure statement with the licensee:

The duration of the employment, listing agreement or contract.
The fees or commissions.
The scope of the activities or practices.
The broker's cooperation with other brokers, including the sharing of fees.

Any sales agreement must contain the zoning classification of a property except in cases where the property is zoned solely or primarily to permit single family dwellings.

A Real Estate Recovery Fund exists to reimburse any person who has obtained a final judgement against a Pennsylvania real estate licensee owing to fraud, misrepresentation or deceit in a real estate transaction and who has been unable to collect the judgement after exhausting all legal and equitable remedies. For complete details about the Fund, call (717) 783-3658.

ACKNOWLEDGMENT

I acknowledge that I have received this disclosure.

Date: ______

_____________________________________
Print (Consumer)

______________________________________________
Print (Consumer)

____________________ ______________________
Signed (Consumer) Signed (Consumer)

____________________ ______________________
Address (optional) Address (optional)

____________________ ______________________
Phone Number (optional) Phone Number (optional)

I certify that I have provided this document to the above consumer during the initial interview.

Date:______ _____________________________________
Print (Licensee)

_____________________________________
Signed (Licensee)

Adopted by the State Real Estate Commission at 49 Pa. Code §35.336.

WARNING!

(ARM) Adjustable Rate Mortgage Holders!

New credit reporting criteria!

A new credit-scoring system that rates borrowers based on the type of mortgage they have could cause people with adjustable mortgages to pay higher interest rates on everything from credit cards to car loans.

Some financial experts, however, say this system bears a close resemblance to so-called universal default, which allows a credit card company to raise a customer's interest rate if he makes a late payment with another creditor.

"This is pretty much going to be all that credit card companies, student loan companies, auto lenders and other banks need to charge customers higher rates solely based on the kind of mortgages they have," said Lynnette Khalfani, a former reporter for t e Wall Street Journal and CNBC, and author of "Zero Debt." "Folks who were teased and seduced to sign up for ARMs just two years ago are paying for that decision in ways they never imagined," Mrs. Khalfani said. "You could never fathom it would cause higher rates on credit cards and higher payments too. That smacks of unfairness to the consumer." Not everyone with ARMs is struggling to make ends meet.