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Real Estate Alert: Did you know…a Broker may lose out on a commission in D.C. if the Broker’s disclosure of dual representation is incomplete or inconspicuous?

June 8, 2022

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On March 23, 2022, the United States District Court for the District of Columbia decided the case of Jones Lang LaSalle Brokerage, Inc. v. 1441 L Associates, LLC, D.D.C. No. 20-3687 (FYP) (“JLL v. 1441”) where a Broker lost out on a commission of almost $800k for failure to properly disclose dual representation of a Tenant and Landlord.

The D.C. Brokerage Act requires Brokers to obtain written consent of the parties to a dual representation and provides a Sample Form for consent. If the dual representation disclosure is given in combination with other disclosures or provided with other information, the disclosure must be conspicuous, printed in bold lettering, all capitals, underlined or within a separate box. D.C. Code § 42-1703(i).

In JLL v. 1441, the Landlord and Tenant did not sign the Sample Form or any separate disclosure form consenting to the Broker’s dual representation. The commission agreement between the Landlord and Broker contained an exhibit mirroring the Sample Form but the exhibit was not signed by the Landlord or Tenant. The lease contained a provision on page 51 of a 65-page lease which stated Tenant and Landlord “consent to the dual agency” and “waive any conflict of interest” but the provision was not bolded, in all capitals, or underlined. Further, the lease did not contain language that the Broker may not disclose to either client any information given to the dual representative by the other client within the confidence and trust of the brokerage relationship. For these and additional reasons, the Court found the Broker’s disclosure of dual representation was incomplete and inconspicuous, making the commission agreement void and unenforceable.

The contents of this Alert are for informational purposes only and do not constitute legal advice. If you have any questions about this Alert, please contact the Shulman Rogers attorney with whom you regularly work or a member of the Shulman Rogers Real Estate Group.

 

CONTACT

Matthew D. Alegi

Ryan D. Malet

Danielle M. Dolch

David M. Kochanski

Marc D. Lipman

Erin August

Kyle Kirby 

This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer.