Broker Nancy at Louisville Realty has designated agent Kevin to represent seller Frank and designated agent Dana to represent buyer Rita in the same in-house transaction. Rita later complains to KREC that she did not receive an agency disclosure form before Dana began showing her properties. An investigation reveals that Dana provided a verbal disclosure at the first showing but never obtained a signed written form. Nancy argues that because she disclosed the designated agency arrangement in the listing agreement with Frank, all parties were adequately informed. Under Kentucky law, which of the following most accurately describes the compliance status of this transaction?
Correct Answer
B) Dana violated Kentucky law by failing to obtain a signed written disclosure from Rita; Nancy may also face liability for inadequate supervision
Under 201 KAR 11:121, the agency disclosure must be in writing and signed by the receiving party — verbal disclosure does not satisfy this requirement. Dana failed to obtain Rita's signed written disclosure form, which is a direct violation of Kentucky's agency disclosure regulations. Additionally, under KRS Chapter 324, principal brokers bear supervisory responsibility for ensuring their affiliated licensees comply with all regulatory requirements. Nancy's failure to ensure Dana's compliance with the written disclosure requirement may expose her to disciplinary liability for inadequate supervision.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
The legal obligation to reveal information that could affect a party's decision to enter into or the terms of a real estate transaction.
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