Real Estate Agency Flashcards
fiduciary obligations (OLD CAR)
Obedience – You must do everything the principal tells you to do, and you may not exceed the authority they give you. That having been said, obeying a client’s instructions is not an acceptable defense for unlawful or unethical behavior. If unlawful instruction is given the agency relationship must be refused or terminated.
Loyalty – You must put client’s interests ahead of all others, including your own.
Disclosure – You must affirmatively disclose all information about the transaction that might affect the principal’s best interests.
Confidentiality – You must not disclose any confidential information about the principal to others (e.g. the highest price they might pay, or a weakness in their bargaining position) that you are not legally required to disclose.
Account – You must account for, and return, any money belonging to the principal.
Reasonable Care – You must protect the principal from foreseeable risks of harm, exercise care and competence, and recommend expert advice when the principal’s needs are beyond your expertise or area of competence (note that no legal advice is allowed under the licensing law).
Megan’s Law
issues surrounding sex offender registries; Massachusetts strictly punishes the misuse or misrepresentation of those registries. It is often best to provide buyers with the information needed to access the registry and check the information themselves, rather than represent its contents.
Tristram’s Landing v. Wait
is a Massachusetts court case that governs when real estate brokers have earned a commission. It is therefore critical to understand so that you know when a client has unfairly withheld payment, and when they are within their rights in doing so.
This court adopted the following rule. When a broker is engaged by an owner to find a purchaser, the broker earns a commission when: (1) he produces a purchaser ready, willing and able to buy on the terms provided by the owner; (2) the purchaser enters into a binding contract with the owner to do so; and (3) the purchaser completes the transaction by closing title in accordance with the provisions of the contract.
If the deal is not consummated because of lack of financial ability on the part of the buyer, or other default of the buyer, then there is no commission as against the seller. However, if the failure of completion of the contract results from the wrongful act or interference of the seller, then commission must be paid (unless contracts say otherwise).
FTC Do Not Call
The FTC Do Not Call List (created in the Do Not Call Implementation Act of 2003) prohibits unsolicited business calls to residential phone numbers on the Do Not Call List, as well as mobile phone numbers. Fines for violations of Do Not Call are up to $40,654 per call. It applies only to residential calls. Existing relationships (under 18 months) are excluded from the legislation. As of 2013, pre-recorded calls (robocalls) are banned without the prior written consent of the consumer being called.
Telephone Consumer Protection Act (TCPA) and the Junk Fax Prevention Act
Both prohibit most unsolicited fax advertisements. In order to legally send an advertisement via fax, you must typically have an existing business relationship with the recipient.
CAN-SPAM
The Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 prohibits commercial electronic messages that do not provide both the address of the sender, and some means of unsubscribing or “opting out” of future messages.
The Children’s Online Privacy Protection Act (COPPA)
COPPA requires that businesses provide consumers with a detailed privacy policy if they collect information via websites, mobile apps, and other networks. It also strictly limits the collection of personal information from children under the age of 13, even if the website or app is not specifically targeted towards children.
Interstate Land Sales Disclosure Act
Requires sellers of subdivisions to file their intent to sell those lots on an interstate basis with the Consumer Financial Protection Bureau if they meet one of the following criteria: 1) the subdivision contains more than 100 lots or condominiums, 2) they are offering more than 25 lots or condominiums for sale simultaneously, or 3) the subdivision contains sized 20 or more acres. It is designed to avoid fraud when properties are sold without having been seen by purchasers by requiring developers to provide purchasers with a written property report detailing title issues, development details, utility costs, soil conditions, etc., and to provide buyers with a minimum of 7 days to rescind their purchase agreement.
Sherman Anti-Trust Act
The act forbids price fixing (establishing uniform pricing), group boycotting of a consumer or non-competitor by a group of competitors, any agreements regarding a division of the market by geography or services offered (also known as market allocation), and contingent sales (also known as tying or tie-in arrangements, which are making a sale contingent on the purchase of another item).
