When must a real estate licensee disclose their agency relationship with a client?

A real estate licensee must disclose their agency relationship with a client at the first meeting of substantive contact. This requirement ensures that the client is fully informed about the nature of the relationship before any significant discussions or decisions are made regarding the real estate transaction. This early disclosure is crucial as it establishes trust and transparency, allowing the client to understand who is representing their interests.

When a licensee has a substantive conversation about the client's needs, preferences, or motivations related to buying or selling property, that interaction marks a pivotal moment where agency disclosure is necessary. This helps prevent any potential misunderstandings about the licensee's role and obligations.

Disclosing the agency relationship prior to marketing a property or after a client has signed a purchase agreement would not comply with the intended regulatory framework that aims to protect clients' interests by ensuring they are aware of their representation from the outset. Likewise, waiting until the closing on a property could lead to confusion or concerns after significant steps in the transaction have already taken place. Therefore, the requirement for disclosure at the first meeting of substantive contact is foundational to the practice of real estate in Minnesota and is designed to safeguard client interests throughout the transaction process.