Chapter 11 Flashcards
define a universal agent
acts on behalf of the client in all matters and situations.
must take legal steps to have this power of attorney, when assigned the person becomes an attorney-in-fact
define a general agent
an agent who is authorized to perform a variety of transactions for the principal, mostly on a continuing basis.
Key word: ONGOING
who is a property manager a general agent for?
property owners.
collects rent, pays bills, authorizes repairs, and negotiates leases on an ongoing basis
who is a real estate agent a general agent for
their designated broker.
the affiliated licensee is the fiduciary
what is vicarious liability
someone is held responsible for the actions or omissions of another person
in real estate, broker can be liable for the acts of his agents
what is a special agent
an agent who is authorized to perform ONE SPECIFIC transaction. aka specific agent.
ex. listing broker hired by seller to find a suitable buyer for the seller’s property
what is a single agent
defined as a broker (agent) who represents either the buyer or seller of real estate, but not both in a transaction
what is a dual agent
broker (agent) represents both buyer and seller. always need prior written consent of both parties.
aka limited dual agency
what is an expressed agency and some examples
agent and principal when agreed upon conditions either orally or in writing
ex. listing contracts with sellers, buyer-broker employment, real estate agency disclosure
what is an implied agency
can be created even if not intentional.
develops with a principal more as a result of acts and conduct.
said to be ostensible (something that appears to be true but isn’t necessarily true)
what is it called when an agency is created when the agent has interest in the property
agency coupled with an interest. agent receives interest in property being listed
this type cannot be revoked by principal nor can it be terminated on principals death
when must a salesperson turn funds over to the broker and when must the broker deposit the funds in a trust account
immediately
UNLESS otherwise agree to in writing by all parties
what is trust money
held for the benefit of the seller and should be deposited in a trust account. meant to separate operational and personal accounts
if a broker has a trust account, how often must he keep accurate records, and must reconcile?
monthly
define commingling
mixing personal or brokerage money with money in trust
define conversion
when broker misappropriates client’s funds for a different purpose than intended
what is never a part of the purchase contract
commission negotiation
when would it be ok for an agent to disclose confidential info about a client
if it affects the principal’s ability to close the transaction as agreed
how long does confidentiality last?
indefinitely
we do not discuss divorces, health issues, deaths, job loss etc
it is a requirement for seller to _____ all material (important) facts
disclose
what is an arm’s length transaction
buyers and sellers act independently and have no relationship to each other
it is to ensure that both parties in the transaction are acting in their own self-interest and are not subject to any pressure or duress from the other party.
what must an agent do if they have an interest in property that is listed with their brokerage
must disclose that interest and receive client’s consent.
if they plan on selling property that they have a personal interest they must inform buyer of interest
are verbal offers valid
yes. and must be presented
what is the exception for offers being presented to the seller
if the seller issues written instructions stating differently
what must an agent do if they have to take legal action to collect a comission
evidence that agent was properly licensed at the time the commission was earned
evidence that there was a signed written agreement
evidence that the agent was procuring cause (making the primary contribution) in securing a signed purchase contract
what is the principal’s primary obligation to a customer
honest and truthful information
what are the agent’s obligation to the customer
honest and fair dealings
reasonable care, so long as it doesn’t compromise their client’s interest
disclosure of material facts
all contracts can be ended by
mutual agreement
or operation of law
what is revocation
if client fires the agent
what is renunciation
if agent fires the client
what is abandonment
if agent agrees to work but does not stay in contact
if an agreement expires and no sale has been accomplished
then the agency relationship ends
if the salesperson dies or becomes incapacitated,
it has no impact on the agency relationship since the employment agreement is with the broker
can bankruptcy end an agency relationship?
by either parties (principal or broker) it can end an agency relationship
if the broker’s license ends
so do all agency relationships
if a salespersons license expires during the listing period the status of the listing agreement is
unaffected
what are latent defects
hidden structural defects
if known to seller, must be disclosed
seller not liable for unknown latent defects
what is the max amount of payment a claimant can receive from the real estate recovery fund
$30,000 per transaction
no more than $90k will be paid out on behalf of one real estate licensee.
what is subrogation
legal term referring to the substitution of one creditor for another.
