Question: Who is responsible for the custody and delivery of property keys to the settlement agent?
The short answer is the that Listing Agent is responsible for the custody and safe keeping of the keys to a listed property. This responsibility does not end until the listing terminates or the property is transferred to the new owner. There have been recent reports of buyer agents removing property keys from lockboxes without authorization from the listing agent. The unauthorized removal of keys from a lockbox even for the purpose of taking the keys to settlement is a violation of the NAR Code of Ethics and CVR MLS Lockbox key rules as possession of the property keys allows access to the property.
Unauthorized access by buyer agents is covered by Standard of Practice 3-9 of the NAR Code of Ethics. In short, SOP 3-9 states that “REALTORS® shall not provide access to listed property on terms other than those established by the owner or the listing broker.” The CVR MLS listing agreement provides that the property owner requests and approves the installation and use of a lockbox for such access as authorized by the property owner. The CVR MLS Lockbox key holder rules state that the lockbox key may only be used for authorized purposes and that failure to return the keys to the lockbox is a violation of the rules. The fine for unauthorized removal of the keys to listed property is $500.
Listing agents should exercise caution when arranging for transfer of property keys and ensure that any third party transfer is done with the owner’s knowledge and consent. Buyer agents should never remove property keys from a lockbox without the consent of the listing agent. If such consent is granted, it is a best practice to deliver the property keys to the settlement agent with a cover letter or memo documenting the delivery and confirming that the keys may not be released until a successful settlement has been achieved.