Every Transaction Requires the ABAD
The Affiliated Business Arrangement Disclosure (“ABAD “) is a required RMAA document for all clients and customers for every transaction. This requirement is based directly on regulations of the Federal Consumer Protection Bureau, RESPA and Georgia License Law. No transaction can be completed without an executed ABAD in the file.
According to Georgia License Law, it is an Unfair Trade Practice to receive anything of value for the referral of any service or product in a real estate transaction to a principal. GA Code 43-40-25-b-6 (C). The ABAD is the document that complies with this requirement.
The current ABAD can be found both in the RMAA HUB under Resources Library > Office Forms and Documents > Affiliated Business Arrangements Disclosure. It can also be found in Remine when the RMAA “Package” is selected. Because vendors may change with time, the form is updated as needed. The current version of the ABAD was updated in September 2021. The previous form is no longer valid.
Even if a transaction falls through, the ABAD is required.
According to a 2009 decision from the US Supreme Court, just as a violation of the rights of “testers” in fair housing test cases to receive “truthful information” supports standing, so does a violation of the right to receive referrals untainted by conflicts of interest. So, even if a deal falls through, the ABAD is still required to be in the file!
Separate from the required ABAD, vendors may be recommended that may not live up to expectations. GAR has provided a document that offers protection to agents in the referral of a vendor. GAR F834 can be very useful and should be considered as an additional document in transactions. It includes the following language.
Furnishing of any names of vendors provided by Broker or Broker's Affiliated Licensee is done as a ministerial act and only as a courtesy to the undersigned and does not in any way constitute any warranty or representation as to the quality of the vendors, their services or subsequent reports. The undersigned acknowledges that they had the option to select any vendor of their choice and that the Broker is not responsible for any guarantees, representations, or warranties of the selected vendors they choose. For good and valuable consideration, the undersigned herewith releases the Broker and the Broker's Affiliated Licensee from any liability or claim arising out of or in connection with the services of vendor.
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