ORS 696.805 and ORS 696.810 establish the requirement for Buyer and Seller’s agents “To disclose in a timely manner to the [client] any conflict of interest, existing or contemplated.” The Oregon REALTORS® Form 9.7 is meant to assist in these disclosures.
Unfortunately, ORS 696 never defines a “conflict of interests,” and in these instances of statutory ambiguity, Oregon has a three-part process to determine the meaning of a term. Under PGE v. BOLI, 317 Or 160 (1993), as modified by State v. Gaines, 346 Or 160 (2009), interpretation of a statute requires (1) examination of the text and context, and a simultaneous (2) review of the legislative history [the discussions the legislature had when passing a law]; if the first two steps fail to yield a result, we resort to (3) “maxims of interpretation” [maxims are general rules about how we construct laws, like “If you have two interpretations and one contradicts other laws, but the other doesn’t contradict any laws, go with the one that doesn’t cause problems”].
The addition of the “conflict of interests” requirement in ORS 696 happened with Senate Bill 446 in 2001, the omnibus bill splitting original broker category into “Broker” or “Principal Broker.” There was no discussion about the conflicts language, so we’re left looking to other areas of the law that do provide clearer definitions of conflicts of interest. Specifically, places like ORS 244, where a conflict of interest is understood as a action that brings private pecuniary benefit or detriment of the person or person’s relative or any business with which the person or relative is associated. In other words, a conflict of interests is a situation where, due to the agency representation, non-commission money is being made by the broker, the broker’s family, or a business owned in part by the broker or the broker’s family. Brokers are hired to assist a client and owes that client a duty of loyalty. The client should never be worried that the broker is more worried about the broker’s own investments or the broker’s sister’s investments.
The client can always agree to let an agent represent them despite the conflict. Brokers can use Form 9.7 to disclose the conflict and by signing the document, the client agrees to let the broker keep representing the client, even with the conflict. In effect, the client would be saying “I don’t mind that it’s your mother’s house that I’m putting an offer on; I want the house and I trust you to do a good job as my agent.”