AB 2992: Protecting Consumers By Leveling the Playing Field

By Michele Allyn
2024 President
Santa Barbara Association of Realtors

In March 2024, the National Association of REALTORS® (N.A.R.) reached a settlement agreement where real estate agents were required to have a written agreement with a buyer before showing properties listed on the Multiple Listing Service (MLS). While this was a major step forward in improving transparency and accountability, the California Association of REALTORS® (CAR) had already begun efforts in 2023 to pass a more comprehensive bill to protect California consumers. These efforts culminated when AB2992 was signed by Governor Gavin Newsom on September 24^th.

Expanding the Scope of Buyer Representation

Unlike the N.A.R. settlement, which focuses solely on homes listed on an MLS, AB 2992 requires a written buyer representation agreement for any property, residential or commercial, whether it is listed on an MLS or not. This means that all licensed real estate agents, regardless of the type of property they are showing, must have a signed agreement in place before representing a buyer. This is a significant improvement in transparency for consumers, ensuring that they are fully aware of the services their agent will provide and the compensation structure before engaging in any transaction.

Additionally, the bill limits the length of these representation agreements to three months. After this period, the agreement must be renewed with the buyer’s signature, allowing buyers the opportunity to reassess their relationship with their agent. This three-month renewal ensures that consumers are not locked into long-term commitments without an option to review the partnership, giving them more control and flexibility in their real estate journey.

C.A.R.’s Proactive Approach

C.A.R. led the charge on AB 2992 because they recognized early on the need for stronger consumer protections beyond what the N.A.R. settlement offered. While the N.A.R. settlement only applied to REALTORS® and MLS-listed properties, AB 2992 covers all real estate licensees in California. This is particularly important because, while there are over 400,000 licensed real estate agents in the state, less than half of them are members of CAR and bound by the organization’s rules. By passing AB 2992, California ensures that every licensed agent—whether they are a REALTOR® or not must adhere to these new standards, which significantly increases the number of consumers protected by these provisions.

The law’s broad applicability provides a uniform standard of professionalism across the entire industry, creating a fairer playing field for all real estate practitioners. Consumers can now expect consistent, transparent practices no matter which agent they choose to work with.

A Stronger Real Estate Market for California

AB 2992 benefits both consumers and real estate professionals by creating a more transparent and accountable market. By expanding protections beyond MLS-listed properties and extending the requirements to all licensed real estate agents, the law ensures a consistent standard of care. Additionally, the three-month limit on agreements encourages ongoing communication and active engagement between agents and their clients, creating stronger and more effective partnerships.

I am proud to support this new legislation. AB 2992 reflects the values that we, as REALTORS®, hold dear: fairness, professionalism, and a commitment to serving the best interests of our clients. We are excited about the positive impact this law will have on California’s real estate market and the added protections it will provide for homebuyers across the state.

At the Santa Barbara Association of REALTORS®, we remain dedicated to ensuring that our members and the consumers we serve are informed and prepared to navigate these new requirements. AB 2992 is a major step forward in promoting transparency and trust in real estate transactions, and we are confident that it will benefit both buyers and agents alike.

Michele Allyn is the owner and manager of Allyn & Associates Real Estate and Lending, a real estate brokerage and mortgage company, serving Santa Barbara, California’s Central Coast, Ventura, Riverside, San Diego and Greater Los Angeles County. Michele has been a member of the Santa Barbara Association of Realtors since 1973, and currently serves as the President of the Board of Directors. Reach Michele at 805-895-5101 or micheleallyn@yahoo.com.