If you are working with a settlement agent in a transition involving the transfer of property, he or she has the duty to look after your best interests. Legally, it is mandatory for them to fill you in with the details of any personal, financial or business relationship that they have with the other party involved in your transaction. If any such relationships exist, your settlement agent must give you a disclosure of interest form before you enter an agreement with them to represent you as an agent. The disclosure of interest form details the nature of the agent's interest and outlines your rights in the agency relationship. Here is a look at some of the information you should expect in a disclosure of interest form when buying or selling property:
A settlement agent can have direct personal interest your transaction, and it is important for you to be aware of that from the onset of the agency agreement. Personal interest in your transaction can occur in various ways. For instance, the settlement agent may be the buyer or seller of the particular property involved in the transaction. They might also be relatives of the person who is buying or selling the property in question.
A disclosure of interest form will also come into use if the settlement agent has business associations with the other party involved in the transaction. For example, the settlement agent has the legal duty to tell you if they receive regular sales referrals from a real estate agent, developer or sales personnel. The disclosure form should reveal the nature of the association and the reason the settlement agent chooses to work with that particular entity. Does he or she receive commission privately after facilitating the sale? Does the agent's business associations with the other party guarantee quality standards? These are some of the things you should pay attention to before you sign a disclosure form revealing business associations between the settlement agent and the other party.
Your settlement agent might also be having some financial association with the party supposed to buy the property or sell it to you. The person might be a shareholder, debtor or creditor in the settlement agency, which leads to a significant influence on the actions of your agent.
Note that all these situations can lead to a conflict of interest and affect the quality of representation and services that you receive from your settlement agent. If you need any further clarifications and guarantees, you can have a written agreement (besides the disclosure form) with your settlement agent to further your interest in the transaction.