Vermont Agency Law Guide for the Real Estate Exam
Understand Vermont agency relationships, VREC disclosure requirements, fiduciary duties, and the rules tested on the Vermont PSI exam.
# Vermont Agency Law Guide for the Real Estate Exam
Agency law governs the relationships between real estate licensees and their clients. Vermont follows the general framework of agency law used in most states, with specific disclosure requirements under 26 V.S.A. Chapter 41.
Types of Agency Relationships in Vermont
Seller's Agent: Represents the seller exclusively. Owes full fiduciary duties to the seller — must present all offers, maintain the seller's confidential information, and negotiate to achieve the seller's goals.
Buyer's Agent: Represents the buyer exclusively. Must disclose all known material defects and information relevant to the buyer's decision. Cannot withhold information the buyer needs even if it helps the seller.
Dual Agent: Vermont permits dual agency with written informed consent from both buyer and seller. A dual agent cannot fully advocate for either party and has diminished fiduciary obligations. The VREC-prescribed dual agency disclosure must be used.
Facilitator (Transaction Broker): Assists both parties without representing either. Does not owe fiduciary duties but must treat both parties honestly and disclose material facts affecting the property's value.
Vermont's Agency Disclosure Requirement
Vermont law requires written agency disclosure before first substantive contact. "Substantive contact" begins when the licensee starts discussing price, motivation, terms, or specific properties with a prospective buyer or seller.
The VREC has prescribed approved disclosure language. Licensees must use approved forms and must obtain a signed acknowledgment from the client. Failure to provide timely agency disclosure is a license law violation and grounds for disciplinary action.
Vermont's Mandatory Property Condition Disclosure
Vermont requires sellers to disclose known material defects in the property's condition. This is not an "as is" sale protection — sellers cannot simply claim ignorance of defects they should have known about. The disclosure requirement applies to all property types, not just residential.
Licensees have an independent obligation to disclose material defects they observe or learn about, even if the seller has not included them on the disclosure form.
Fiduciary Duties
Vermont recognizes the standard fiduciary duties: - Loyalty: Agent's primary duty is to the client - Obedience: Follow lawful client instructions - Full disclosure: Disclose all material information - Confidentiality: Protect client's private information - Accounting: Handle client funds properly - Reasonable care: Act competently and professionally
Listing Agreements in Vermont
Vermont listing agreements must contain: - Names of all parties - Property description - Commission amount and how it is calculated - Definite start and expiration dates - Conditions under which commission is earned
Open-ended listings with no expiration date are not enforceable in Vermont.
Common Exam Questions
- When must agency disclosure be given in Vermont? (Before first substantive contact)
- Can a Vermont licensee represent both parties as a dual agent? (Yes, with written consent from both parties)
- If a seller's agent observes a structural crack the seller did not disclose, what must the agent do? (Disclose it to buyers — material fact disclosure is a non-negotiable duty)
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