Who the agent works for: California, New York and Texas forms

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Kooky

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A home buyer in the United States can spend an afternoon with a friendly, well-informed licensed agent and still not know the one thing that shapes everything that agent says: whose side the agent is on. The person unlocking the door may work for the buyer, for the seller, for both, or for neither in the full sense. There is no single national answer, because the three states read for this guide each explain it in a paper of their own.

This guide reads three of those papers side by side: the disclosure form written into section 443 of New York's Real Property Law, the Information About Brokerage Services notice of the Texas Real Estate Commission, and the Disclosure Regarding Real Estate Agency Relationship described by the California Department of Real Estate. It sets out which relationships each state names, when the paper must reach the buyer, what a signature on it does and does not mean, and where the three states part ways. It is about who represents whom. The separate question of the written agreement a buyer signs to hire an agent, and how that agent is paid, is another subject.

New York Real Property Law section 443 as published by the New York Senate (revision of 19 August 2022); Texas Real Estate Commission form page.

Three states, three papers, one question

The three documents share a purpose and little else. New York's is a statutory form: its wording sits inside section 443 itself, in subdivision 4, with one version for buyers and sellers and another for landlords and tenants. Texas uses a notice published by its regulator, the Texas Real Estate Commission, known as TREC; the form page gives it the identifier IABS 1-2 and an effective date of 1 January 2026. California's form carries the longest name, the Disclosure Regarding Real Estate Agency Relationship, and the Department of Real Estate, in its Real Estate Bulletin of winter 2019, describes it as a form that every agent must give to clients.

The vocabulary changes at each border, and Texas does not use dual agency at all. The term "transaction broker" does not appear in any of the three state pages read for this guide. The closest things they contain are the Texas intermediary and a short New York provision on licensees who work with a party in a non-agent capacity. Both are covered below, under their own state.

New York: when the form must reach each party

Section 443 applies only to transactions in residential real property, which the statute defines as property used or intended as a home and improved by a one-to-four family dwelling, or by condominium or cooperative apartments. Land that is still unimproved and on which such homes are yet to be built is outside the definition. An "agent", for this section, is a person licensed as a real estate broker, associate broker or salesperson who acts in a fiduciary capacity.

The statute then fixes a moment for each agent to hand over the form, and that moment depends on who the agent works for and who is receiving it. The table sets out the four cases as subdivision 3 gives them.

For a buyer, the first consequence is that the form can arrive more than once. A buyer who walks into a home marketed by a listing firm should be handed the form by the seller's agent at the first substantive contact, and the same buyer should be handed it again by any agent the buyer is about to engage. In each case the agent must obtain a signed acknowledgment from the person who receives it. The form says as much: according to the statutory text, it tells consumers that they may receive more than one disclosure form.

What New York's form says each agent owes

The statute's definitions are short. A buyer's agent is an agent who finds residential property for a buyer, or who presents the buyer's offer to the seller and negotiates for the buyer. A seller's agent is wider than the listing agent alone: it covers a listing agent acting alone, an agent cooperating with a listing agent, an agent acting as the seller's subagent, and a broker's agent engaged to find a buyer.

The form then puts the practical meaning in plain terms. A seller's agent is engaged by the seller to represent the seller's interests, by securing a buyer on terms acceptable to the seller, and "does not represent the interests of the buyer". A buyer's agent is engaged by the buyer to represent the buyer's interests, by negotiating a purchase, and "does not represent the interests of the seller".

To its own principal, each of these agents owes the same list of fiduciary duties. The form names six: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and the duty to account.

The other side of the table is not left without protection, and this is the part of the form a buyer dealing with a seller's agent may read most closely. In dealing with the buyer, the form says a seller's agent should exercise reasonable skill and care, deal honestly, fairly and in good faith, and disclose all facts known to the agent that materially affect the value or desirability of the property, except as the law provides otherwise. Those three points are owed to someone who is not the agent's client.

The duties run in the opposite direction too. A buyer's agent dealing with the seller should use the same skill and care and the same honest, fair and good-faith dealing. The disclosure point changes shape: what the buyer's agent should disclose are facts known to the agent that materially affect the buyer's ability or willingness to perform the contract to buy, and the form adds that this must stay consistent with the agent's fiduciary duties to the buyer.

Set side by side, the two lists show what representation adds. Loyalty, confidentiality and obedience are owed only to the principal. Skill, honesty and a defined duty to disclose are owed across the table.

New York's broker's agent: help from another firm

New York names one relationship that the other two states' pages do not. A broker's agent, in the statute's definition, is an agent who cooperates with or is engaged by a listing agent, a buyer's agent or a tenant's agent, but who is not in the same firm, and who assists in locating property.

The feature that matters to a buyer is distance. A broker's agent has no direct relationship with the buyer or the seller, and the form states that the buyer or seller cannot give instructions directly to the broker's agent. Because of that, the form says, the buyer or seller does not carry vicarious liability for what the broker's agent does. Direction comes from the listing agent or the buyer's agent who brought the broker's agent in, and that agent is the one liable for the broker's agent's acts.

Dual agency and designated agents in New York

A dual agent, in section 443, is an agent acting as both the buyer's agent and the seller's agent in the same transaction. The form allows a real estate broker to represent both sides on one condition: both the buyer and the seller give their informed consent in writing.

The form is direct about the price of that consent. A dual agent, it says, will not be able to provide the full range of fiduciary duties to the buyer and the seller. The agent must explain the dual role, and both parties are told that by consenting they give up their right to undivided loyalty.

New York's version of designated agency is called dual agency with designated sales agents. A designated sales agent is a licensed salesperson or associate broker, working under the supervision of a broker, who is assigned to represent one client when the same broker also represents a different client in the same transaction. With the written informed consent of both sides, the broker may assign one sales agent to the buyer and another to the seller. Each then functions as that party's agent.

The form does not present this as full representation restored. Even with designated sales agents, it says neither agent can provide the full range of fiduciary duties, and each must explain that undivided loyalty is not on offer.

New York also allows consent to be given ahead of time. The statute calls this "advance consent": written informed consent signed by the buyer or the seller, either to dual agency or to dual agency with designated sales agents, and in the second case naming the agent appointed for each side. Subdivision 3 says it can be given simply by indicating it on the disclosure form, and the form carries options for it.

Signatures, refusals and records in New York

The acknowledgment is the form's last part: boxes for the relationship, the names of the licensee and the firm, the advance consent options, the designated agent appointments where they apply, and lines for signatures and dates. Once it is signed, section 443 requires the agent to give the signed acknowledgment to the party and to keep a copy for not less than three years.

The statute provides for a party who does not sign. Subdivision 3 deals with the case: if a buyer or seller refuses, the agent must set out the facts of the refusal in a written declaration, made under oath or affirmation, and keep that declaration for not less than three years.

Two closing provisions set the limits of the section. Subdivision 5 says it does not apply to a real estate licensee who works with a buyer or a seller in a capacity other than as an agent, under terms agreed with that party. Subdivision 6 says nothing in the section limits or alters the common law of agency as it applies to residential transactions.

The New York Senate's published version of section 443 shows its most recent revision as dated 19 August 2022.

Texas: one notice at the first substantive communication

Texas approaches the same subject through a single notice with a single trigger. According to TREC's guidance on the form, a licence holder must give the Information About Brokerage Services notice in writing at the first substantive communication with a party about a specific property, a requirement the guidance places in section 1101.558(b-1) of the statute it abbreviates as TRELA. TREC describes the form as mandatory "for all practical purposes".

The regulator controls how the document looks and where it can be found. Under TREC Rule 531.20(e), as the commission describes it, the text must be reproduced verbatim, with spacing, borders and placement matching the published form, although the broker's details may be filled in beforehand. Rule 531.20(b) requires each broker and each sales agent to link to the form from the homepage of their website. The label of the link is prescribed: either "Texas Real Estate Commission Information About Brokerage Services" in at least 10-point font, or "TREC Information About Brokerage Services" in at least 12-point font.

TREC's guidance lists the situations in which the written notice is not required, under section 1101.558(c):

• a residential lease of less than one year, where no sale is being considered;
• a meeting with a party the licence holder knows to be represented by another licence holder;
• a communication at an open house about the property being shown.

The open house exception marks a difference a buyer can feel. In New York, a seller's agent hands over the form at the first substantive contact with a buyer. In Texas, a conversation at an open house about that house does not by itself require the written notice.

A further case sits outside the notice altogether. A licence holder who is acting solely as a principal, buying or selling on his or her own account, is not required to give written agency information, according to TREC. A different duty applies instead under Rule 535.144: written notice that the person holds a licence, given before entering a contract, and a lease counts as a contract here.

Texas intermediaries: one broker between two parties

Where New York and California speak of a dual agent, Texas law uses another model. TREC's guidance states that dual agency is not permitted, citing section 1101.561(b) of TRELA. A broker who is to represent both the seller and the buyer in the same sale acts as an intermediary, and the guidance sets out what must be in place first.

The written authority has a formal requirement of its own. The document must state the conduct prohibited under section 1101.651(d), and TREC's guidance says it must do so "in conspicuous bold or underlined print".

That prohibited conduct is the core of the model. As TREC summarises it, an intermediary may not favour one principal over the other, and may not reveal one principal's confidential information without written instructions. Three exceptions are listed: a disclosure required by TRELA, a disclosure required by a court order, and information that materially relates to the condition of the property. A defect in the house is therefore not a secret the intermediary keeps for the seller.

Price receives separate treatment. Without written authorisation, the intermediary and anyone appointed under it may not disclose that the seller will accept a price below the asking price, or that the buyer will pay a price above the one submitted in a written offer.

Texas also has its own form of designated representation. With the written consent of the parties, the intermediary may appoint licence holders associated with the broker to work with each side. TREC's guidance adds that the intermediary may delegate the authority to make those appointments to another licence holder, who may not then designate himself or herself as one of the appointed licence holders.

The consequences of getting this wrong fall on the licence holder. TREC states that a failure to comply with the intermediary provisions, sections 1101.558 to 1101.561, may lead to disciplinary action: revocation or suspension of the licence, a reprimand, or an administrative penalty.

California: an agent for one side, or a dual agent

California's rules on agency disclosure sit in the Civil Code. The account given here rests on a single document, the Department of Real Estate's Real Estate Bulletin of winter 2019, volume 78, number 4, which cites Civil Code sections 2079, 2079.13 and 2079.21. Everything in this section is the position as that 2019 bulletin describes it; the current text of the Civil Code was not read, and nothing here confirms that the rules are unchanged.

According to the bulletin, every agent must give clients the form titled Disclosure Regarding Real Estate Agency Relationship, and the form requires the agent to state which of three positions applies: acting exclusively for the buyer, exclusively for the seller, or as a dual agent. In an exclusive arrangement, the bulletin says, the buyer's agent represents the buyer and the seller's agent represents the seller.

The wording of the duty is stronger in tone than New York's list. A dual agent in California, the bulletin states, owes "a fiduciary duty of utmost care, integrity, honesty and loyalty" to both parties. An agent who represents only one party owes no fiduciary duty to the other, but must still act honestly, diligently and in good faith towards that other party. The pattern matches New York's: full fiduciary duties to the client, a floor of honest dealing for everyone else.

Dual agency is allowed in California on a condition of knowledge and agreement. The bulletin says a broker may act as a dual agent only when both parties are aware of it and consent. It also explains how easily the situation arises: dual agency exists when a broker, including a corporate broker, represents both the buyer and the seller.

The bulletin points to a decision of the California Supreme Court on exactly that situation. In Horiike v. Coldwell Banker Residential Brokerage Co., decided in 2016 and citing Civil Code section 2079.13, the court, as the bulletin reports it, held that an associate licensee of a dual agent owes equivalent fiduciary duties to both buyer and seller.

California's rule on price is found in Civil Code section 2079.21. Without the express written consent of the seller, a dual agent may not tell the buyer that the seller will accept less than the listing price. Without the express written consent of the buyer, a dual agent may not tell the seller that the buyer will pay more than the offering price. The bulletin adds that these limits do not change the dual agent's duty regarding confidential information other than price.

One viewing, three states: an illustrative case

The differences are easiest to see with one situation carried across the three states. What follows is a worked example, not a real case. Its assumptions are these: a buyer with no agent sees a house advertised by a listing brokerage, speaks in detail with the listing salesperson about that house, and later asks whether the same brokerage can also represent the buyer in making an offer.

Two details in the table depend on circumstances. In Texas, the conversation in this example calls for the written notice unless it took place at an open house for that house. In New York, the price row carries no rule because section 443, as read for this guide, sets no separate price rule; the form instead tells both parties that a dual agent cannot give undivided loyalty.

In all three states the paper answers the same question, and in none of them does a friendly viewing answer it.

What the pages read for this guide leave open

A reader comparing states should know the limits of the sources used here, because they are not equal in depth.

For New York, the full statutory text of section 443 was read, including the form in subdivision 4. The version of the form that the New York Department of State publishes for agents to hand out was not read for this guide, so the layout a buyer receives is described here only as the statute sets it.

For Texas, the account comes from TREC's form page and the guidance published with it, not from the text of the notice. The notice's own description of a broker's duties to an owner, to a buyer and as a subagent is therefore not reproduced here. The form page gives the identifier IABS 1-2, while one answer in the guidance on the same page still refers to the form as IABS 1-0.

For California, the account comes from the Department of Real Estate's bulletin of winter 2019, not from the current text of the Civil Code. This guide therefore does not state when the California form must be delivered, which property types it covers, or how the relationship is confirmed in the purchase contract, and it does not describe any amendment made to those sections after that bulletin. Those points need to be read in the current Civil Code.

In each state the form describes relationships in general terms. Which relationship a particular buyer is in depends on what was disclosed, what was signed and what the licence holder actually did, and that is a matter for the facts of the case.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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