We are often asked why we ask for contact information in purchase agreements.
It’s all about sending and delivering notices that are legally sufficient.
First, it is important to understand the difference between a Client and a
Clients vs. Customer
All brokerage relationships fall into one of two broad categories: (1) broker-client
relationships; and (2) broker-customer relationships. In a broker-client
relationship, the real estate broker is representing the client and is acting as his
or her legal agent in buying, selling, or leasing property. In Georgia, a broker-
client relationship can only be formed by the parties entering into a written
The other type of brokerage relationship is known as a broker-customer
relationship. With this type of relationship, the broker is not representing the
customer in a legal or agency capacity. However, the broker can still work with
the customers and help them by performing what are known as ministerial acts.
These include, for example, identifying property for sale or lease, providing pre-
printed real estate form contracts, preparing real estate contracts at the direction
of the customer, and locating lenders, inspectors, and closing attorneys on behalf
of the customer. It does not include delivery of notices.
What are Notices?
If a document only requires the signature of the sender, it’s a notice. If it requires
signatures of both parties, it’s an agreement. Notices have to be delivered to an
email or physical address or fax included in the contact. There are many notices
given in the life of a contract and, of course, in the death of a contract. Think
about unilateral 8 day extensions, notice to proceed with financing, counter
offers, unilateral termination of contracts, notices from a landlord to a tenant (and
vice versa) and exercise of options. The list goes on.
Delivery of Notices to Clients
If you have an executed Seller Brokerage Engagement Agreement or a Lease
Listing/Management Agreement, the Seller or Landlord is your client. The same
is true for a Buyer Brokerage Agreement or a Tenant Brokerage Agreement. You
can therefore accept legal notices on behalf of your clients, but you may only
deliver them to clients in person or to any physical address, e-mail address
and/or facsimile number specifically included in the signature block of the
agreement. If a physical address (not a PO Box) is in the Address for Receiving
Notice section of the signature block, you can mail a Notice to a client. If an
email address or a fax number is included, you can email or fax a notice to the
client. A telephone number doesn’t work (but a fax number does). If there is no
appropriate contact information for delivering a notice to your client, you have to
hand deliver. If the client is on the West Coast, you may be on an airplane. And
that is why it is so important to include the right contact information for clients in
Notices to Customers
If you do not have a written agreement with a party or if you have a written
agreement that makes the party your customer, you cannot accept notices for
them. Examples are the Authorization to Show Unlisted Property and the
Agreement to Work with the Buyer as a Customer. Both are customer
relationships, even though they are written. If you are representing the opposite
party, you have to rely on the information in the signature block. You will be
thankful if you remember to have the customer include their contact information
in the signature block.
Notice to a Represented Party
Of course, notice to a represented party can be sent to that party’s agent. That
agent is responsible for delivery to their client.
The ABCs of Agency. GAR CB01
Purchase and Sale Agreement. GAR F201
Real Estate News, Brokers Blog & More