Unit 4 Flashcards
Real Estate Agency
special relationship between broker and parties involved in transaction, governed by statutory law Art 15 of Real Estate Act of 2000
Agents and Clients
Agents - hired
Clients - those who hire
General Agency
relationship between broker and sponsoring broker
Agent
Individual authorized to represent interest of another person; principal hires the agent
Agency
Relationship in which consumer has given consent (implied or express) to licensee to represent them in real estate transaction
Brokerage Agreement
Agreement to provide brokerage services and receive compensation for those services
Client
person or entity licensee represents
Compensation
Payment for executing services
Consumer
a person for whom an agent provides services
Confidential info
info that can’t be shared without client authorization; must be shared by law or revealed by another person
Customer
person for whom services provided but not represented in agency relationship - NO advice or counsel given
E & O Insurance
Errors and omissions insurance purchased by sponsoring broker
IL Residential Real Property Disclosure
Required for seller to complete in 1-4 unit buildings
Accounting
Licensees must provide copies of signed sales contracts and documents within 24 hours; funds must be accounted for and specifically handled
Confidentialtity
Key element in fiduciary duties; can’t disclosure anything that would harm principal’s bargaining power
Puffing
exaggerating of property’s benefits –legal
Opinion vs Fact - can’t misrepresent material defects or omit facts - this can lead to liability for the licensee
Latent Defects
Structural defect usually not uncovered in ordinary inspection; seller and broker has duty to disclose if they have direct knowledge; may be liable for not disclosing
Buyer Action re: substantial defects/Latent defects
Statute of limitations is 1 year
Stigmitized Properties
property society has branded as undesirable because of events that happened there; always consult an attorney with these issues; *courts have ruled you don’t have to disclose HIV or AIDS from previous owner/tenant
Article 15 Disclosure Claims - claims for stigmatized properties
2 year statute of limitations
Megan’s Law
law requiring sex offender info available to public by law enforcement. Seller agent not required to disclose neighboring offenders; not to be disclosed by agent - just refer to police or online database
Express Agency
principal and agent enter into contract; written or oral
Implied Agency
agency created by implied agreement; agency exists because of actions of the parties (show property, haven’t signed anything but actions show agency)
Compensation
Source of compensation does not determine agency; in Illinois buyer agent gets paid by seller agency
Gratuitous agency
agency with no fee involved
**Termination of Agency
- death/incapacity of either property
- destruction of property
- expiration
- mutual agreement
- breach
- operation of law
- completion
Termination of Brokerage Agreement
Brokerage agreement must have definite termination date. NO auto extension clauses in Illinois
Agency coupled with interest
agent has an interest in subject of agency. CANNOT be revoked by principal or terminated on principal’s death
Universal agent
need power of attorney; empowered to do anything on behalf of principal
general agent
represents principal in broad range of matters related to specific transaction or ex. Property Manager; **broker and managing broker acting as general agent for sponsoring broker
Special agent
one specific act or business transaction. Licensee usually special agent to client. Hired to represent them in one specific act
Designated Agent
person authorized by sponsoring broker to act as agent of principal; brokerage may assign an agent to a principal.
Dual Agent
Represents both buyer and seller in transaction; legal in Illinois law as long as both informed and consent. Can’t act as dual agent when their property is involved;
**Fiduciary Duties of Agents (6) COLDAC
- Care
- Obedience - act in good faith and obey instructions unless the instructions are illegal
- Loyalty - they cannot act in own best interests; principal is first priority
- Disclosure - principal must receive all information, offers, counteroffers, information about the property
- Accounting - funds must be accounted for and follow specific protocols related to those funds; signed contract to all parties within 24 hours; funds deposited in specific escrow account (no comingling) within next business day
- Confidentiality- agent must recognize and cannot disclosure to other parties
Ministerial Acts
admin acts; performed for consumer and do not rise to the level of representation; don’t have to be licensed to provide this information; set up appointment, set up open house; referring a client to another office. Do not need to be licensed to perform these acts
