FAQs on the Waiver of Duties Statement FAQs

by Lorie Garland
Vice president
Legal Services

Last month the OHIO REALTOR reviewed changes to the license law provisions when House Bill 150 becomes effective on October 9. This bill clarifies that the fiduciary duties owed a client cannot be waived. However, HB 150 does allow a client to waive a licensee’s obligation to perform the specific duties provided in ORC 4735.63 and 4735.65 which are owed to a buyer or seller.

In order to obtain a client’s waiver of a specific duty(s), a new Waiver of Duties form must be executed. HB 150 requires the Superintendent (with the approval of the Ohio Real Estate Commission) to establish this new state form by rule. The “Waiver of Duties Statement” has been developed and is in the process of being formally adopted. This process will not be completed until after the effective date of HB 150. However, the Waiver of Duties Statement can be used by licensees beginning on October 9. The Waiver of Duties Statement is available on the OAR’s website, www.ohiorealtors.org and the Division of Real Estate and Professional Licensing’s website www.com.state.oh.us/real.

The following are Q & A’s regarding the new Waiver of Duties Statement.

Q. Why are a licensee’s fiduciary duties listed on the Waiver of Duties Statement?

A. ORC 4735.621 specifies that certain information must be included in the form. A list of a licensee’s fiduciary duties is one of the required sections. In addition, by statute the Waiver of Duties Statement must also contain the following:

• A list of those duties contained in section 4735.63 or 4735.65 of the Revised Code, set forth in a manner that allows for the parties to indicate which of those duties are being waived;
• A statement that no other licensee is required to perform the waived duty on behalf of the client;
• A statement that legal counsel or other professionals may be hired by the client;
• A place for the client and licensee to sign and date the statement.

Q. When does a licensee have to use the Waiver of Duties Statement?

A. A licensee will use the Waiver of Duties Statement if his client is waiving a duty that is listed in the “Duties That May Be Waived” section of the form.

Q. A licensee will be taking a listing where he will not be performing the duties listed under the “Sellers May Waive” section of the form. When should the seller sign the Waiver of Duties Statement?

A. At the time the listing agreement is entered into.

Q. Can a client waive just one of the duties listed on the Waiver of Duties Statement?

A. Yes. Only the duty to be waived should be initialed and the form must be signed by the client and the licensee.

Q. If a licensee always performs all of the duties listed on the form, will the licensee ever have to use the Waiver of Duties Statement?

A. No. The form is only required if a duty is waived.

Q. What if a client refuses to sign the Waiver of Duties Statement?

A. ORC 4735.621 provides that a licensee must perform the specific duties owed a seller or buyer client unless the client agrees to waive those duties and signs a Waiver of Duties Statement. If a client does not sign the form the duties must be performed by the licensee.

Q. Is a copy of the seller’s Waiver of Duties Statement required to be provided to the buyer’s agent?

A. No. HB 150 does not require the listing agent to give a copy to the buyer’s agent.

Q. If a buyer’s agent asks the listing agent for a copy of the seller’s Waiver of Duties Statement to confirm that the listing agent is authorized to allow the buyer’s agent to negotiate directly with the seller, can the listing agent provide a copy of the form?

A. The Division of Real Estate and Professional Licensing has taken the position that the Waiver of Duties Statement could be considered confidential information and therefore should only be provided with the seller’s consent. HB 150 provides that if the listing agent has provided a buyer’s agent with written authorization to negotiate with the seller, the buyer’s agent can then negotiate directly with the seller. The buyer’s agent does not need to obtain a copy of the Waiver of Duties Statement to verify that the listing agent is not performing these services for the seller.

Q. How long must a brokerage maintain a client’s Waiver of Duties Statement?

A. The license law provisions require that all transaction related documents be kept for a period of three years.

Q. If a client signs the Waiver of Duties Statement and later asks the licensee to perform a waived duty, does the licensee have to perform the waived duty?

A. No. In this case the client is asking the licensee to change the terms of their agency relationship. The licensee could agree to the change and perform the waived duty (maybe for an additional fee) or decline to change the terms of their original agreement. If any change is agreed to, the change should be documented.

Q. A listing agreement is entered into where the listing broker will perform all duties for the seller but he ends up not performing a waivable duty because the client requests that he not do so. For example, in a commercial transaction the seller decides to use his attorney to draft the counter offer. Does a Waiver of Duties Statement have to be executed when the client chooses not to use the licensee to perform a service?

A. No. The Division of Real Estate and Professional Licensing has taken the position that in this situation as long as the licensee is willing to perform all duties, the fact that the client chooses not to have him do so does not require the licensee to have the Waiver of Duties Statement signed . However, it is recommended that the licensee document the client’s request that he not draft the counter offer in this case.