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Real Estate > Law of Agency > Flashcards

Law of Agency Flashcards

1
Q

What is an ethical dilemma?

A
  • do not know the right course of action
  • have difficulty doing what they consider to be right
  • find the wrong choice very tempting
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2
Q

Duties of an agent

A

Obedience- follow instructions of client
Loyalty- put interests of client first
Disclosure disclose information about property and parties
Confidentiality- kept confidential forever
Accounting- funds held in separate trust
Reasonable Care- competence and expertise

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3
Q

General Agency vs. Special Agency

A

General can represent in particular type of transaction

Special is most limited. Can only follow instructions

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4
Q

Employee

A 
Minimum monthly compensation
Broker pays fees
Broker can set quotas
Mandatory policies
Team and not individuals
Minimum time in office
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5
Q

Termination of agency relationships

A 
Purpose is completed
Expires
By mutual agreement
Death or incapacity
Condemnation or destruction of property
Bankruptcy
Operation of law
Revocation of license
Abandonment by agent
Revocation of agreement by principal
Termination by broker
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6
Q

Sherman Anti-Trust Act and Commission Rates

A

Commission rates must be negotiable and not set

Cannot limit competition by allocating markets or customers

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7
Q

Duties of the principal and the definitions of those duties

A

CRIP
Compensation- agent should be paid
Reimbursement- agent should be reimbursed
Indemnification- principal will protect agent from loss
Performance- principal expected to perfom

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8
Q

Elements of a valid listing agreement

A 
Signatures of owners and agent
Legal description
List price
Term
commission
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9
Q

Disclosure requirements for the agent to customers and clients

A

Material facts

Disclosure of agency, property condition and environmental hazards

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10
Q

Requirements for Independent Contractor Status

A 
Must hold license 
Must have commission
Have contract specifying contractor status
No mandatory policies
Agent pays expenses
Cannot be made to attend sales meetings or seminars
No set work hours
No benefits
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11
Q

Types of deceptive or misleading advertisements or advertisement practices

A 
Inaccurate or misrepresents property
Advertising listing without permission or name of broker
Failing to remove after it ends
Identifies sales agent as broker
Created confusion about permitted use
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12
Q

Comparative Market Analysis

A

Based on properties that have sold that are most similar

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13
Q

Unlicensed assistants and permitted activities

A 
Manage office
Accompany license holders
Act a on-site apartment manager
Assist in arranging financing with direction of license holder
Place for sale sign 
Accompany inspector
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14
Q

TREC rules for advertising and signs

A 
Cannot mislead
Appear as if agent is broker
Offer to sell or lease property without permission
Offer property on different terms
Place sign on property without permission
False promises
Disclose compensation for providers
May not rank providers
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15
Q

Setting commission rates – violations

A

Cannot fix commission prices, limit competition or boycott discount brokers
Sherman Anti-Trust Act
Clayton Act

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16
Q

TREC advertising rules and font requirements

A

Brokers name at least ½ font of largest contact information
Team names must end in team or group
Agent name and broker name must be on all advertisements
IABS and CN 1-2 on website

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17
Q

Subagency

A

Broker is assisting with sale of another brokers listing and buyer is unrepresented

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18
Q

The concept of Agency and agency relationships

A

One person represents and acts for another
Based on trust
Agent is expert
Involves money or property

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19
Q

TREC website requirements for links to the IABS form

A

Link must be on homepage of website in at least 10 pt font and labeled Texas Real Estate Commission Information about Brokerage Services

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20
Q

How most real estate agents are paid – page 153

A

Gross check and 199-MISC form

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21
Q

Results of broker death and the effect on sponsored agents

A

Agents and broker placed on inactive

All listings terminated

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22
Q

Who can legally earn a commission/sue for a commission/share a commission

A

only broker

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23
Q

Team name registration rules

A

Cannot imply they are separate from broker
Must end in team or group
Must be registered
Must notify within 30 days of no longer using
Cannot have agent’s name
Brokers name must be 50% of size of font used

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24
Q

Team names – requirements – acceptable and unacceptable words

A

Must end in team or group
Can use realty
Cannot use company, brokerage or associates

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25
Q

express authority

A

specific oral instructions

26
Q

implied authority

A

the norm

27
Q

Fiduciaries and the fiduciary relationship

A

Must put principal interest first and give full disclosure

28
Q

Trust accounts, commingling and conversion

A

Must have separate trust account
Cannot commingle funds with personal funds
Conversion- spending client funds without authorization

29
Q

Stigmatized properties – conditions and disclosure requirements

A

Physical or psychological stigma

Must disclose unless AIDS/HIV related or death

30
Q

Intermediary – appointed associates – duties and requirements

A

Represent both sides but has to remain neutral
Appointments must be done in writing
Give advice to respective parties
Must have authorization from both clients

31
Q

Deceptive Trade Practices Act

A

1973
Consumer can sue for damages
Agent has to have knowingly deceived consumer

32
Q

Texas Real Estate Commission

A

1949
Enforce and administer License Act
Can suspend/revoke licenses

33
Q

Defamation – definition/explanation/examples

A

Harming reputation of another by making false statement

Requires evidence of false statement, statement made to other person and damage caused

34
Q

type of listings

A

open
exclusive agency
exclusive right to sell
net listing

35
Q

open listing

A

can sell with other brokers or themselves. No commission promised

36
Q

exclusive agency

A

can list with only one broker or sell themselves. No commission promised

37
Q

exclusive right to sell

A

only broker can sell and owner can sell. Commission promised either way

38
Q

net listing

A

seller has minimum amount of proceeds at closing. Commission is the difference from what is made

39
Q

DTPA best practices

A 
DTPA – steps for an agent to help avoid lawsuits – page 206 
Disclose defects
Use seller’s disclosure form
Give list of 3 inspectors
Recommend inspection
Have client reinspect after repairs done or written waiver
Do not give opinion of property
Keep notes
40
Q

Intermediary with and without appointments – requirements/scenarios

A

With appointments requires at least 2 agents. Broker cannot represent one

41
Q

Information About Brokerage Services – IABS – purpose and content

A

Inform about duties of agent to clients and representation

42
Q

Canons of Professional Ethics

A 
Fidelity
Integrity
Competency
Consumer Information (must be displayed)
Discriminatory Practices
43
Q

dual agency

A

represent both sides and negotiate illegal

44
Q

cooperative sale

A

two different brokers represent each side

45
Q

Disclosure of Representation

A

At first contact

Oral or writing

46
Q

Advantages of Buyer/Seller Agency Only

A

No unintentional dual representation
Brokers do not have to act as intermediaries
Agents only responsible for one party

47
Q

Disadvantages of Buyer/Seller Agency Only

A

Many buyers do not want to sign agreement or pay commission

Agents can only make commission from one side

48
Q

Five sources of ethical standards and what each includes

A 
Utilitarian Approach
Rights Approach
Fairness or Justice Approach
Common Good Approach
Virtue Approach
49
Q

Utilitarian Approach

A

Ethical actions produces greatest balance of good over harm to those affected

50
Q

Rights Approach

A

Individuals have the right to have their moral rights protected and
respected, and the right to be told the truth, and not to be injured.

51
Q

Fairness or Justice Approach

A

Ethical action is equal for all, or if not, then fair for some,
based on some defensible standard.

52
Q

Common Good Approach

A

Ethical standards and actions embrace common conditions

that are important to the welfare (common good) of all.

53
Q

Virtue Approach

A

Ethics are habits that enable us to act accordingly as persons who
are truthful, honest, courageous, compassionate, generous, tolerant, and possess integrity,
fairness, self-control, and prudence.

54
Q

IABS Presentation

A

first substantive discussion

55
Q

Duties to customer

A

Honesty
Disclosure of material facts
Handle funds with care
Be responsible for oral or written statements

56
Q

Agency by Actual Authority

A

grants express authority either written or oral

57
Q

Ostensible Agency

A

actions lead one to assume one is an agent

58
Q

Agency by Ratification

A

does not have authority to act but client accepts if after learning

59
Q

Agency by Estoppel

A

client inadequately supervises agent

60
Q

Agency Coupled with an Interest

A

broker is owner or interested in property

Real Estate (6 decks)

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