The GAR Purchase Agreement includes a detailed representation and agency section that identifies the Brokers and the type of Buyer or Seller representation that exists between Brokers and the parties. One of the reasons for requiring clarity of representation is that notice to a party can be accepted, or cannot be accepted, by the named Broker according to the type of representation that exists.
The GAR PSA generally provides that Notice to the Broker or sales agent representing a party in a client relationship constitutes notice to the represented party. Therefore, if the accepted offer is first delivered to the broker representing the party who first made the offer as a client, the binding agreement date would be the date of that delivery, even though the offeror did not receive direct notice on that day. Another example, Notice of Termination to the Broker constitutes Notice to a Buyer/Seller client.
Designated Agency - The Broker is representing the Buyer or Seller as a Designated Agent
An exception to the Client rule under the GAR PSA is where the Broker is acting in a designated agency capacity. In designated agency, only notice to the sales agent designated to represent the party as a client is deemed notice to that party; notice to the Broker is not deemed notice to the party.
Dual Agency - The Broker is representing the Buyer or Seller as a Dual Agent
Another exception to the Client rule under the GAR PSA is if the Broker is acting as a dual agent, the Broker cannot accept notice for either party. In other words, notice given to the Broker does not constitute notice to the client. Notice has to be given directly to the Buyer or Seller.
Transaction Broker - The Broker is not representing either party
If the broker is not representing either party in a client relationship but is instead acting as a transaction broker, then that broker is not authorized to receive notice on behalf of any party. Therefore, notice of acceptance given to the transaction broker is not effective as notice unless and until the transaction broker delivers the notice to a party. Only when notice of acceptance is delivered to the offeror or a broker representing the offeror in a client relationship will a binding agreement date be established.
Customer Agency and Client Agency – The Broker is representing one party as a client and another party as a customer.
This situation happens often in both Purchase Agreement and Lease Agreements. In this case, the Broker can accept notice for the client, but cannot accept notice for the customer. Notice to the Customer is given when the customer actually received the notice.
April 12, 2022
Reference: Weissman, Seth. The Red Book on Real Estate Contracts in Georgia (pp. 97-98). BookBaby. Kindle Edition.
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