4.3 - Law of Agency

Question 1

can an infant act as an agent?

Answer 1

yes

Question 2

what is a principal vs third party?

Answer 2

principal: party that the brokerage/you represent
third party: the other parties in the transaction (that you don’t represent)

Question 3

how old must someone be to be licensed under RESA?

Answer 3

19 years

Question 4

is the agent or brokerage a part of the sale?

Answer 4

brokerage

Question 5

what is an express contract (agency relationship)?

Answer 5

written or oral contract with mutual agreement of both parties

Question 6

what is implied agency?

Answer 6

an agency implied by conduct. created by/through the conduct of the parties. can create an agency relationship through your actions based on your actions/words.

Question 7

what is (authority by) ratification?

Answer 7

when agent’s authority can be granted retroactively. agent informs principal of his actions and the principal accepts, principal is bound by contract.

Question 8

what is agency by estoppel?

Answer 8

when the principal acts in such way as to lead a 3rd party to believe that the agent has authority to act on behalf of the principal. very limited right.

Question 9

when does an agent have actual authority?

Answer 9

express contract relationship (written or oral agreement, mutual)

Question 10

what’s express authority?

Answer 10

authority that is created and limited by the terms of the contract. Promise to pay commission.

Question 11

what is implied authority?

Answer 11

authority of agent to perform whatever needed to carry out express authority granted - i.e. showing open houses

Question 12

what is usual/customary authority?

Answer 12

agent is governed by what is usual in the trade i.e. collecting deposit

Question 13

what is apparent authority?

Answer 13

results from estoppel - ppl think that agent is legit bc principal makes the impression to 3rd party that they are

Question 14

whats the difference between implied agency and implied authority?

Answer 14

implied agency: agent misleads someone
apparent authority: principal misleads someone

Question 15

why can authority be terminated at will?

Answer 15

because the relationship is based on MUTUAL consent

Question 16

does authority terminate with frustration (i.e. house burns down)?

Answer 16

yes

Question 17

when does the duty of confidentiality (from agent for client) terminate?

Answer 17

never

Question 18

what are 3 cases where agent may be liable to 3rd party?

Answer 18

1. no disclosure of agency
2. no authority (agent commits act without permission)
3. agent committed torts

Question 19

before assisting or representing anyone, what must an agent do?

Answer 19

disclose the type of representation/relationship

Question 20

3 types of agency relationships

Answer 20

sole agency (client and realtor)
no agency (unrepresented party)
dual agent (basically banned in bc)

Question 21

what can a licensee do when dealing with an unrepresented party?

Answer 21

• provide general market information
• help fill out/complete contract without providing advice
• presenting offers to/from the unrepresented party

Question 22

where do BCDSA prescribed standard forms get submitted?

Answer 22

the brokerage

Question 23

what is the disclosure of interest in trade?

Answer 23

licensee buying/selling real estate for himself or an associate. must be given before agreement is entered into, doesn’t apply to rentals. if you don’t disclose: void contract and disciplinary proceedings

Question 24

do you need to have a disclosure of representation in trading services if you’re hosting an open house and didn’t receive personal info from consumer?

Answer 24

no

Question 25

what is the disclosure of risks to unrepresented parties form?

Answer 25

advise risks involved in being an unrepresented party, used when providing trading services to a client and unrepresented party in same transaction

Question 26

what is the disclosure of risks associated with dual agency form and where must it be submitted?

Answer 26

gives info about concept of dual agency, managing broker must sign it, you must submit it to the BCFSA

Question 27

what is the agreement regarding conflict of interest between clients form?

Answer 27

a form that discloses conflict of interest and gets permission from all parties(to continue to represent 1 party).

Question 28

what are the 3 parties in a conflict of interest between clients form?

Answer 28

released client continuing client licensee

Question 29

when must you provide the notice to seller regarding contract assignments?

Answer 29

when the buyer removes 2 standard terms to assign

Question 30

what is the disclosure to sellers of expected renumeration (DER)?

Answer 30

used when offer is made to seller, tells how much licensee expects to get in a dollar amount. must be submitted with EVERY offer/

Question 31

who pays the licensee their renumeration?

Answer 31

their brokerage

Question 32

what are net listings? are they allowed?

Answer 32

when realtor renumeration is sold-list. not allowed.

Question 33

do you have to disclose renumeration/benefits to principal?

Answer 33

yes. or else its a secret profit. not allowed.

Question 34

what should a licensee doff a client instructs them to withhold a disclosure of material latent defect known to the licensee?

Answer 34

licensee must refuse to provide further trading services on behalf of that client

Question 35

3 types of real estate agency contracts

Answer 35

exclusive listing multiple listing open (general listing)

Question 36

what is an exclusive listing?

Answer 36

an exclusive right to sell for a specific period or time. if the owner sells himself, still has to pay commission. if 2nd agent is used, 2 commissions could be payable.

Question 37

what is a multiple listing?

Answer 37

an exclusive right to sell where listing is distributed to all members of the real estate board and placed on MLS

Question 38

what is an open (general) listing?

Answer 38

owner may employ a number of agents to find the purchaser. commission is then paid to the agent who is the effective cause of the sale. owner can also sell himself and no commission will be payable