Notice Requirements in the GAR Contract A Deep Dive

​One of the review points of every brokerage agreement is whether contact information for the client and the licensee is included in the signature block of the brokerage and purchase agreements.  Legal notices to parties are driven by that content. If an email, a fax or a physical address is not included, that form of notice cannot be used. Without good contact information, you may find yourself personally delivering documents to a party – either close by or far, far away.  Read on.

Rules for Properly Delivering Notice.
 

1. Notices can only be delivered: (1) in person; (2) by courier, overnight delivery service or by certified or registered U.S. mail (hereinafter collectively “Delivery Service”); or (3) by e-mail or facsimile.  The GAR Contracts do not permit notice to be sent by regular first-class mail because it is a less reliable means of sending notice and difficult to prove actual receipt. Notice by text message is not permissible.  Agents and parties do it but notice by text is not valid notice.  If there is a dispute, a text message notice (unless previously agreed as allowable on a contract or amendment) will fail.  In the event of a dispute, the burden of proof of delivery is on the party sending the notice.  The person delivering or sending the written notice signed by a party may be someone other than that party. 
2. Delivering notice to a client’s broker, or the licensee working for the client, is legally the same thing as delivering it directly to the client. The notice is deemed to be delivered to the client as of the time it is received by the client’s broker or agent, even though the seller or buyer has yet to deliver the notice to the client. An exception to the above is in the case of dual brokerage (the agency is representing both parties as clients).  See below.
3. Written notice requirements apply even before a contract is binding.
4. The GAR Contract requires that notices be signed by the party giving the notice. This effectively prevents a real estate licensee from giving notice on behalf of a client unless the licensee first gets the notice signed by the licensee’s client. In other words, under the GAR Contract, licensees can receive notice on behalf of a client but cannot normally send notice without it first being signed by the client.
5. Dual Agency. Neither a licensee nor the broker is authorized to receive notice in a dual agency situation.  Notice must be directly to the party.  This can be changed to allow receipt by the agent or broker by a special stipulation, if the parties agree.
6. Receptionist or the agent on duty. If a notice is delivered in person to a broker’s office and the licensee or the broker is not present to receive the notice, the party delivering the notice should get the receptionist or the agent on duty to acknowledge in writing the date and time of delivery. However, notice in this situation is probably not considered received by the licensee on behalf of the client until it is actually received by the licensee or broker.
7. Designated Agency. With designated agency (where the broker has a client relationship with both the buyer and seller and has designated one agent to represent the seller and another to represent the buyer), notice given to the appropriate designated  agent will be deemed notice to the agent’s client. Notice to the broker will not be considered notice to either client.
8. Customers. Notice to a broker or agent is not notice to their customers.  If you are working with a party as a customer, legal notices must be sent directly to the customer to be valid.  That’s why the GAR contract asks whether the party is a client or a customer. Further, to ensure that the other party in the transaction has an ability to give notice to the unrepresented party, the GAR Contract requires the unrepresented party to provide an email address and/or fax number at which the unrepresented party can receive notice.

 
When Is Notice Received? It depends.
Under the GAR Contract, notice is considered “delivered and received,” and therefore effective, at varying times depending on the method with which such notice was sent.
 
1. Notice via e-mail.Notice sent by electronic mail (email) is effective at the time it is sent. Put simply, the very act of sending notice electronically is the legal equivalent of “delivery and receipt,” provided that the notice is sent to an address properly identified in the contract or that was subsequently provided following another permissible method of notice. However, even with this rule in place, it is wise to ensure that the email or fax actually went out and the other party actually received it—an email left sitting in an “outbox” has not been “sent” for notice purposes. It is good practice for email notices to be sent “read receipt requested” to make proving actual receipt easier should a dispute arise.
 
2. In-person deliveryFor in-person delivery, notice becomes effective at the time it is actually received by the party for whom the notice was intended (either the party or the party’s authorized agent). While the GAR Contracts permit notices to be delivered in person, there is no requirement that the person to whom the notice is given be present to receive the notice. Because proof of delivery can become an issue, if the addressee is not expected to be available, the party giving the notice should have another person present (a witness) who can attest to the delivery of the notice. In all events, the party delivering the notice should create a record of the time, date, and manner of the delivery of the notice.
 
3. Via Delivery ServiceNotice sent by delivery service (overnight delivery or certified/registered U.S. mail) is considered delivered at the time when it is delivered to an address provided in the contract. This is in contrast to in-person delivery (where notice is only effective upon actual receipt). For example, imagine that the buyer sent a unilateral notice of termination to the seller’s home address (provided in the contract) that was delivered. Even if the seller was away on vacation and did not actually receive or read the notice until weeks later (or even at all), the notice would still be considered “delivered and received” on the date it was delivered.
 
4.Fax Transmission Notice sent via a facsimile number or email address provided in the contract is deemed to have been given as of the date and time it is transmitted. A fax transmission confirmation should be kept in the file.  If fax confirmation is not produced by the fax machine or is produced incorrectly, the fax can be hard to prove. In such cases, the fax notice would not be presumed to have been received when transmitted, but it can still constitute good notice if the sender can otherwise prove that it was received. Remember, a fax number must be in the signature block of the contract for a fax notice to be valid.
 
Many agents work from their home offices and only infrequently go to the broker’s office. For this reason, the GAR Forms Committee has permitted an agent to list a home office facsimile (or any other number they wish).  However, this can be particularly dangerous to the agent away from home, due to notices by fax often being deemed received at the time they are sent.