Section 4 - Intro to CA Agency Law

Question 1

Is agency disclosure required for residential properties?

Answer 1

Yes, but not in cases of residential properties with 5 or more units.
Also required by commercial properties.

Question 2

One agent represents one client.

Answer 2

SINGLE AGENT

special

Question 3

An agent who is engaged by a seller to represent the seller’s interests.

Answer 3

SELLER’S AGENT

special

Question 4

An agent who is engaged by a buyer to represent the buyer’s interests.

Answer 4

BUYER’S AGENT

special

Question 5

Represent both the buyer and seller in the same transaction.

Answer 5

DUAL AGENT

special

Question 6

Works under another agent with the principal’s permission to perform some of the acts of agency. Both principals and their agents are liable.

Answer 6

SUB AGENT

special

Question 7

An agent (possibly from another firm) who works under another agent WITHOUT the principal’s permission. ONLY the principal’s agent is liable.

Answer 7

BROKER’S AGENT

special

Question 8

Introduces the buyer and seller. This person does not represent either party and performs no other duties.

Answer 8

FINDER OF MIDDLEMAN

non-agent

Question 9

Assists the tenant in locating and securing an appropriate property to lease.

Answer 9

TENANT’S AGENT

special

Question 10

Assists the landlord in finding a tenant.

Answer 10

LANDLORD’S AGENT

special

Question 11

Acts within the scope of the property management agreement on behalf of the landlord.

Answer 11

PROPERTY MANAGER

general

Question 12

When a licensee has broad responsibility to handle all details of a specific transaction, what type of real estate agency relationship usually exists?

A) Designated
B) General
C) Special
D) Universal

Answer 12

B) General

A general agent has the responsibility of handling all details of a specific transaction. Property managers often serve as general agents.

Question 13

Which of the following describes a universal agent?

A) Buyer’s agent
B) Conservator
C) Escrow officer
D) Listing agent

Answer 13

B) Conservator

A universal agent has broad authority to act on behalf of the principal, such as a person with a power of attorney or a conservator. A special or specific agent has limited scope of authority.

Question 14

Someone placed in a position of trust for another.

Answer 14

FIDUCIARY

Question 15

An agent must carry out a client’s instructions. If, on the other hand a client instructs an agent to do something that is unlawful, the agent can’t obey that instruction. If not resolved, the agent must terminate the agency agreement.

Answer 15

OBEDIENCE

OLD CAR - fiduciary duty principle

Question 16

Agents must act in their clients’ best interest at all times—above the interests of all others, including the agent’s own

Answer 16

LOYALTY

OLD CAR - fiduciary duty principle

Question 17

You must disclose all known material facts to all parties.

Answer 17

DISCLOSURE

OLD CAR - fiduciary duty principle

Question 18

An agent can’t share any information the agent’s client asks to be kept confidential. It also extends beyond closing.

Answer 18

CONFIDENTIALITY

OLD CAR - fiduciary duty principle

Question 19

You’re responsible for safeguarding any money or documents you receive on your client’s behalf. It may continue even after the transaction closes.

Answer 19

ACCOUNTING

OLD CAR - fiduciary duty principle

Question 20

Because of the agent’s license, they are presumed to have skill and expertise in real estate matters that are superior to those of the average person. If questions come up that are outside the scope of expertise, the agent’s responsibility under this duty is to refer clients and customers to a competent professional in that field.

Answer 20

REASONABLE SKILL & CARE

OLD CAR - fiduciary duty principle

Question 21

You and your client agree to and understand the relationship. The agreements may be written or unwritten.

Answer 21

EXPRESS AGREEMENT

Question 22

An agency relationship may be created without anything in writing, or even without verbal agreement.

Answer 22

IMPLIED AGREEMENT

Question 23

Acceptance after the fact, sometimes in contrast to a prior agreement. It may occur through contractual paperwork or the parties’ actions.

Answer 23

RATIFICATION

Question 24

A legal doctrine that says that a person is stopped from asserting rights or facts that aren’t consistent with a previous statement, position, or behavior.

Answer 24

ESTOPPEL

Question 25

As a seller’s agent negotiating a buyer’s offer, you’ll have a relationship with both the seller and the buyer. You represent the SELLER.

Answer 25

SELLER’S AGENCY

Question 26

As a buyer’s agent, you’ll perform certain tasks for your client. You exclusively represent the BUYER.

Answer 26

BUYER’S AGENCY

Question 27

Is sub-agency practiced in CA?

Answer 27

No.

Due to changes to the MLS and state laws.

Question 28

Pam is a licensee with SMS Agency and has just listed a property for her seller client, Bob. Dan is a licensee with DTWN Associates and is working under Pam on this listing to assist Bob.

Is this SUB-AGENCY OR NON SUB-AGENCY?

Answer 28

SUB-AGENCY

Question 29

Ned represents Sofia in the sale of her townhome. Luciana represents Sofia’s buyer, Arturo. What is Sofia’s relationship to Luciana?

A) Luciana is Sofia’s customer.
B) Luciana is Sofia’s fiduciary.
C) Sofia is Luciana’s client.
D) Sofia is Luciana’s customer.

Answer 29

D). Sofia is Luciana’s customer.

Sofia is Luciana’s customer and Ned’s client. Arturo is Ned’s customer and Luciana’s client.

Question 30

Camille has a listing for a townhome and appoints Ivy as her sub-agent. Ivy brings a buyer customer to the transaction and the buyer purchases Camille’s listing. What’s true about the agency relationships in this situation?

A) Camille owes her loyalty to Ivy.
B) Ivy is Camille’s sub-agent and owes loyalty to the seller.
C) Ivy owes her loyalty to the buyer.
D) The buyer is the sub-agent to the seller.

Answer 30

B) Ivy is Camille’s sub-agent and owes loyalty to the seller.

The sub-agent (Ivy) works for the seller’s agent (Camille) and owes loyalty to the seller.