Unit 4: Authorized Relationships, Duties, and Disclosure Flashcards
Judge-made law manifested in decrees and judgments of the courts (case law)
common law - unwritten law
Law created by the enactment of legislation
Statutory Law
The body of law created by administrative agencies in the form of rules, regulations, orders, and decisions.
administrative law
A person who delegates authority to another is called
the principal
person who accepts the authority (and the responsibilities, duties, and obligations associated with that authority) is called
a representative.
the agent
authorized by the principal to perform acts associated with the continued operations of a particular job or a certain business of the principal.
general agent
One authorized by a principal to perform a particular act or transaction, without contemplation of continuity of service as with a general agent.
special agent
brokerage relationship options in a residential transaction:
1.
2.
3.
The appropriate relationship type is determined by the:
- Nonrepresentation (no brokerage relationship)
- Single agency
- Transaction broker
broker
Three Duties Required in All Brokerage Relationships
A Account for all funds
D Deal honestly and fairly
D Disclose all known facts that affect value of residential property
A person in a position of trust and confidence with respect to another person.
fiduciary
Caveat Emptor
Latin for “let the buyer beware.”
Conducting negotiations on one’s own behalf without being subject to the other party’s control or influence.
A transaction where the parties are independent and on equal footing. The parties are strangers to each other and both trying to get the best deal. (most transactions are like this)
At arms length
Two real estate licensees designated to represent the buyer and the seller as single agents in a nonresidential transaction. The buyer and the seller must have assets of $1 million or more and sign disclosures stating that their assets meet the required threshold.
In a residential transaction this is:
designated sales associate
an illegal dual agency.
Representing both principals in a transaction (illegal agency relationship in Florida). A conflict of interest.
dual agency
Transaction brokers provide a limited form of nonfiduciary representation to a buyer, a seller, or both in a real estate transaction.
limited representation
The sale of improved residential property of four or fewer units, the sale of unimproved residential property intended for use as four or fewer units, or the sale of agricultural property of 10 or fewer acres.
residential sale
Per Section 475.01, F.S., a broker who represents, as a fiduciary, either the buyer or the seller but not both in the same transaction.
single agent
A broker who provides limited representation to a buyer, a seller, or both in a real estate transaction, but does not represent either in a fiduciary capacity or as a single agent.
transaction broker
The _____ delegates authority to another. The _____ accepts the authority and responsibilities.
principal
agent
The seller is the ____ or ____.
the client or the principal
A transaction that is NOT at arms length is bad because:
- it ruins the assessed value
- will be reappraised to get the fair market value
- in a short sale, the bank wants full sale price for lender, or else they’ll get a smaller return on their investment
A sale of secured real property that produces less money than is owed the lender. The lender releases its mortgage so that the property can be sold free and clear to the new purchaser.
a short sale
If authorized by the principal, the property manager is a ____________ because they show and rent apts, collect rents, supervise maintenance, handle tenant relations and bookkeeping. Therefore they are authorized to perform on a CONTINUED basis a broad range of services.
general agent
Sales associates and broker associates are ______ of their broker. They solicit listings and buyers, negotiate contracts, attend closings, and perform other real estate services on behalf of their broker. This is on a CONTINUED basis.
general agents
When there’s a single transaction, such as selling a home, you are a _____.
special agent of the seller
The Brokerage Relationship Disclosure Act is intended to ____________________________________ that can be granted to a broker and the duties brokers have in each type of brokerage relationship.
inform and educate the public regarding the types of authority or brokerage relationships
Transaction brokers have
limitations
You have to work for your client’s best interest. This is a ______ relationship, as a fiduciary.
4 attributes you should show your client:
single agent relationship
confidentiality
loyalty
disclosure
obedience
for sale by owner is an example of a ________ relationship.
3 ADD:
nonrepresentation
account for all funds
deal honestly and fairly
disclose all facts that effect value
The broker doesn’t represent the customer (the 3rd-party buyer or seller).
no brokerage relationship
Two authorized relationships that do not owe fiduciary duties:
1.
2.
They work with:
transaction broker
nonrepresentation
the customer
single agent has a ___________ with their ______.
fiduciary relationship with their principal/client
A single agent is a broker who represents, as a fiduciary, the buyer or the seller but not _____________
both in the same transaction.
Confidential information learned during the course of the single agency _____ be divulged ____ or ____ the transaction has concluded and the agent-principal relationship has ended.
cannot
before or after
In a single agent relationship with the seller, the seller is the _____ and the broker is the ____ of the _____.
principal
agent, principal
Key Points of a Transaction Broker Relationship
Transaction broker relationship is presumed in:
___________ to a buyer, a seller, or both the buyer and the seller (in the same transaction within the same brokerage)
No __________ with the buyer or the seller
Parties are represented as ________.
all residential and nonresidential transactions
Limited representation
fiduciary relationship
customers
In Florida, it is presumed that licensees are:
operating as transaction brokers
A transaction broker provides ________ representation to a buyer, a seller, or both.
limited
Transaction brokers do not represent either buyer or seller in ________.
a fiduciary capacity.
Transaction brokers exercise _____ confidentiality.
limited
Brokers must ____________ entrusted to them with regard to a real estate transaction.
Such holdings are considered _______ or ______ and must be kept separate from the broker’s funds.
account for all funds
trust funds or escrow funds
The transaction broker relationship requires that the licensee exercise _____________, including not divulging the sellers’ motivation for selling their property.
limited confidentiality
A written agreement to gain the principal’s permission to a change in brokerage relationship.
Consent To Transition
The sale of improved residential property of four or fewer units, the sale of unimproved residential property intended for use as four or fewer units, or the sale of agricultural property of 10 or fewer acres.
residential sales
Types of Transactions That Do Not Require Brokerage Relationship Disclosures
________ transactions
______or _____agreements (except when there is an option to purchase residential property)
______opportunities (except for property with four or fewer residential units)
_______
_______
nonresidential rent or lease business auctions appraisals
The Brokerage Relationship Disclosure Act mandates that the duties and obligations that have been detailed in this unit apply to _____ real estate transactions (______and _______).
However, written disclosures are required only for residential sale transactions when the brokerage firm acts in the capacity of ______ or in ________.
all
residential and nonresidential
a single agent or in a no brokerage relationship.
Written disclosures are not required when the brokerage firm acts in the capacity of ________ because this relationship is _____under Florida law.
transaction broker
presumed
The sale of improved residential property of four or fewer units, the sale of unimproved residential property intended for use as four or fewer units, or the sale of agricultural property of 10 or fewer acres.
residential sale
The sale of improved residential property of four or fewer units, the sale of unimproved residential property intended for use as four or fewer units, or the sale of agricultural property of 10 or fewer acres.
residential sale
The duties of the _____________ and _________ must be fully described and disclosed in writing to a buyer or a seller.
single agent relationship
nonrepresentation
The duty disclosures can be in ____________ or included as part of another document, such as a _________ or ____________.
separate and distinct disclosure document
a listing agreement or buyer broker agreement.
If the disclosure document is incorporated into a listing or buyer broker agreement, a signature line must be inserted ___________. It is not sufficient to only have a signature line at the bottom of the listing or buyer broker agreement.
immediately following the disclosure information.
When incorporated into other documents, the required disclosure notice must be of the________ than other provisions of the document and must stand out.
The first sentence must be _________. The list of duties must be presented on the disclosure in _______________________.
The disclosure notice may include information concerning the real estate brokerage, such as the company name and logo, address, phone number, email address, et cetera.
same size or larger
printed in uppercase and bold type.
the same order as listed in the statute
The no brokerage relationship notice must be disclosed in writing before the showing of property. A ____ relationship.
nonrepresentation
The ______ disclosure must be made before, or at the time of, entering into a listing agreement or an agreement for representation, or before the showing of property, whichever occurs first.
single agent
Recall that under Florida law, it is presumed that all licensees are operating as ___________ unless another brokerage relationship is established. There is no requirement to give a written _________ disclosure to the buyer and/or the seller.
However, ________ must fulfill the duties of a __________ when that form of representation is selected.
Transaction Broker
licensees
transaction broker
Brokers must retain brokerage relationship disclosure documents for _____ years for all residential transactions that result in a written contract to purchase and sell real property. Documents may be stored in a digital format. Files of properties that have failed to close must also be retained.
5
Written disclosures are needed for residential transactions with _________ or _______.
single agent
nonrepresentation
An auction of real property is:
NOT a residential transaction
Brokers must retain brokerage relationship disclosure documents and buyer broker agreements for __________ for all residential transactions that result in ________ to purchase and sell real property and all nonresidential transactions that use designated sales associates.
5 years
a written contract
Residential sales are defined as the sale of improved residential property of _____ or fewer units, the sale of _______ residential property intended for use as ______ or fewer units, or the sale of agricultural property of ______ or fewer acres.
4
unimproved
4
10
There is no requirement to give _________ when working in a transaction brokerage capacity. However, licensees must fulfill the duties of a transaction broker when that form of representation is selected.
a written disclosure
Designated sales associates may ______ for certain ________ transactions.
only be used
nonresidential
A brokerage relationship between a principal (or a customer) and a broker may be terminated because of bankruptcy of the customer.
In other words,
Bankruptcy of a prospective buyer may terminate a buyer broker relationship.
The no brokerage relationship disclosure must be made ______ the showing of property.
before
The single agency disclosure must be made ____ or _____ entering into a listing agreement or an agreement for representation, or before the _____ whichever occurs first.
before, or at the time of,
showing of property,
single agent relationship duties include to use:
and present
+ COLD
C
O
L
D
skill, care, diligence
all offers and counter offers
confidentiality (cannot leak info to opposite party)
obedience
loyalty
disclosure (keep principal fully informed at all times)
Brokerage relationship disclosure requirements apply to
residential transactions. sale of residential property of four or fewer units
