[Note: I have recently been retained on a short-term basis by Compass, who is discussed herein. They did not and cannot buy my opinions on Notorious ROB or on Industry Relations, but you should make up your own mind about my views. All views here are mine and mine alone, and do not represent those of any of my clients, partners, colleagues, friends and enemies.]
At a late night lobby bar session here in Denver, where I am attending the Signal event, a key question in the current kerfuffle around private listings came up. I've mentioned it and discussed it on these pages in the past, but I thought it might be helpful/useful to get a bit more into it.
The issue is informed consent.
The way this typically comes up in conversation is something like this:
- Everyone agrees that if a seller really understands the risks and downsides of private marketing or pre-marketing, and still wants it, then there's no problem. Judges, celebrities, etc. etc. – we know the exceptions.
- The problem the opponents have is that they think some companies and agents (the poster child is Compass) just push private listings and pre-marketing at scale, as a program, which is against the interests of most sellers, in order to double-end deals or in some other way benefit.
- These sellers are just signing up, trusting their agents, and being taken advantage of.
I have written that if that happens, then lawyers will be knocking soon. Those lawsuits – which some of my friends have been warning for years are coming – will be decided on this single issue: Was there informed consent?
It strikes me that we all might benefit from what informed consent means, what it looks like, and what brokers and agents need to look at to see if they're getting informed consent from the seller, or if they're pushing a program (and thereby opening themselves up to liability).
I am not your lawyer. None of this is legal advice. Please consult your own attorney to figure out what you need to do.
