Washington Real Estate Law

Objectives

Upon completion of this section, the student should be able to:

• Describe the obligations to the client and other parties involved.

• Demonstrate an understanding of what is meant by "unauthorized practice of law" by a licensee

• Demonstrate an awareness of when a licensee should suggest that their client seek legal counsel.

This course follows the required Washington Department of Licensing curriculum and is meant to cover the laws and rules that govern real estate. In Washington, that means a complete knowledge of our Revised Codes of Washington (RCW's) and Washington Administrative Codes (WACs). While the state requires all brokers who get their license for the first time to learn these same laws and rules, it is intended that brokers reacquaint themselves with the law after having the experience as a broker. Your perspective on many of the laws will certainly be different from when you first learned this prior to taking the state exam. 

Washington State Department of Licensing rules and the laws the legislature puts in place are meant primarily to protect the public. This is an overriding theme you will see throughout the course and all of the state laws. It's important as a broker that you understand this goal since it will provide you with a good rule of thumb when you are in the field and may not remember a specific law or rule. You should always confirm your actions are lawful with your supervising managing broker, but acting for the public good is a great start.

Obligations to Clients and Other Parties Involved

A broker has a duty to his/her client and other parties involved. The distinction between a client and a customer has to do with responsibility and agency.

A licensee in a relationship with a client must:

• Be loyal
• Demonstrate lawful obedience
• Uphold confidentiality 
• Act in the client's best interest
• Disclose all pertinent information
• Provide the 'Real Estate Brokerage in Washington' pamphlet (formerly 'The Law of Real Estate Agency', renamed January 1, 2024)

A licensee in a relationship with a customer and a client must:

• Deal honestly and in good faith
• Not be negligent and exercise reasonable skill and care
• Account for all monies handled by others
• Disclose all material facts
• Present all offers

Example: 

Susan with ABC Realty is the listing agent for the Browns. Because Susan has a listing agreement with the Browns, she has established an agency with the Browns as their broker. During an open house, the Smiths visit the home and want to buy it. Susan decides not to be a dual agent and to only represent the Browns. She writes up an offer stating that she is representing the Browns and that the buyers are representing themselves. She further advises the Smiths to seek independent legal counsel before signing the contract. While Susan has supplied real estate services to the Smiths by writing up the offer, the Smiths are not her clients. They are her customers and she owes a duty to the Smiths.

A licensee must deal in good faith and in a professional ethical manner with all parties involved in a transaction.