Chapter 4 Flashcards
An agent
s a person who is empowered by contract (or action) to represent the interest of someone (you) called a Principal or Client.
The agency relationship is governed by
the statutory law, which are based on current records today
To create an agency relationship you must have
A principal/client
Task
Agent
A fiduciary relationship is one
where there is the utmost loyalty and trust in the agency
There are four types of agency which are
Universal agent is one that handles all delegated business of the principal
The Universal Agent has the power of attorney
and is called an Attorney in Fact
A general Agent
handles all delegated business of the principal
Agency Coupled with An Interest
when the real estate licensee is a partner in the ownership of the property as well as represents the partners in an agency relationship.
Special Agent
handles one transaction for one seller of one property. This is the most common type of real estate representation
There are three ways an agency relationship can be created
- Written or Expressed Agency - written or oral contract
- Implied agency - created by the act of the parties
- Ratification of agency - always created after the fact
Statute of Frauds
it is an old English statute adopted in almost all the United States and its purpose is to prevent fraud
What is an Arm’s Length Transaction?
Each seller and buyer are knowledgeable about the transaction
Caveat Emptor means
Let the buyer be aware
Dual Agency means
representation to both, buyer and seller at the same time with the same commitment and dedication and this is illegal under Florida law
Undisclosed dual agency means
one of the parties is unaware that a dual agency exists. This is also illegal
Subagent is
one who assists in some or all of the duties as assigned by the Agent to do a job for a Principal.When a broker assumes the role of Agent, all sales associates under that broker take on the role of sub-agent.
Types of agency relationship
- No brokerage relationship - agent represents one side or the other in the sale transaction but not the one on the form
- Single Agent Broker - an agent that represents the buyer or seller but not both
- Transaction Broker - an agent that provides limited transaction representation to a buyer, a seller or both but does not represent in a fiduciary capacity
- Designated Sales Associate - a special case for non-residential transactions where two licensees under the direction of one broker act as single agents.
No brokerage transaction means
the buyer or seller have no representation in the transaction but the broker will help them both complete the transaction
Transaction Broker Relationship Obligations
Broker provides limited representation to a buyer or seller. Provides limited confidentiality and no fiduciary responsibility.
Agents can change from a single agent to a
transaction broker in the middle of the process by filling out the correct form
Designated Sales Associate
One that can represent more than one client participating in a transaction that exceeds over a million dollars
Events that may cause termination of agency:
Fulfillment of the purpose of the agency
Time period expired as stated in the limit
Breach or cancellation by one of the parties
Mutual consent
Death or incapacitation
Destruction of the property
Bankruptcy on either party
