Unit 4-Authorized Relationships, Duties, and Disclosure

Question 1

What is an AGENT?

Answer 1

Person entrusted with another’s business authorized to represent and act for the principal

Question 2

Brokerage Relationships in FL

Answer 2

1-Transaction Broker
2-Single Agent
3-No Brokerage relationship

Question 3

Transaction Broker

Answer 3

Under FL presumed all licenses are operating as Transaction Brokers unless a single agent or NO Broker relationship established IN WRITING

Provide LIMITED REPRESENTATION to a buyer, seller, OR both in a RE transaction but does not represent either in a fiduciary capacity

Question 4

Single Agent Relationship

Answer 4

Represent EITHER buyer or seller as FIDUCIARY but NOT BOTH in same transaction

Question 5

No Broker Relationship

Answer 5

Brokerage all NOT represent the buyer or the seller.

They simply facilitate the transaction from contract to close. EX: For Sale By Owner

Question 6

Who establishes the appropriate type of relationship?

Answer 6

The Broker

Question 7

What are the three types of Law?

Answer 7

1-Common Law(unwritten law)
Judge made law
Based on fundamental principle of absolute loyalty

2-Statutory Law
Written statutes enacted by legislature

3-Administrative Law
Created by administrative agencies in form of rules, regulations, orders and decisions
Statute 475 Empowers FREC to govern RE practice.

Question 8

What is Dual Agency and is it legal practice in FL?

Answer 8

When a brokerage firm represents both the buyer and the seller as fiduciary in the same relationship

It is essentially accepting a single agent relationship with the buyer and then accepting one with the seller

It is ILLEGAL in FL

Question 9

What defines a RESIDENTIAL SALE?

Answer 9

Sale of improved property of 4 or fewer units

Sale of unimproved property intended for use as 4 or fewer units

Sale of Agricultural property of 10 acres or less

Question 10

Wha are the duties of a transactional broker?

Answer 10

-Deal Honestly and Fairly
-Account for all funds
-Use skill, care and diligence
-Disclose all known facts
-Present all offers
-Exercise Limited Confidentiality
-Perform any additional duties mutually agreed
upon.

Question 11

What are the two ADDITIONAL duties of a Single Agent broker relationship that distinguish it from that of a Transactional Broker?

Answer 11

-Loyalty

-Obedience
Act in good faith according to principals lawful instructions

Question 12

What are the 3 essential duties of ALL Brokerage Relationships

Answer 12

A-account for all funds
D-deal honestly and fairly
D-disclose all known facts

(ADD)

Question 13

Brokerage Relationship Limitations

Answer 13

1-if TRANSACTION w/Seller
- may act as transaction for buyer in same transaction OR No Broker capacity

2-if SINGLE AGENT for seller
-may act as NO Broker w/Buyer

Question 14

What are the WRITTEN disclosure requirements for the 3 broker relationships.

Answer 14

For a SINGLE AGENT and NON REPRESENTATION relationship..it must be disclosed to buyer OR seller as either a separate and distinct Disclosure Document OR included in part of another document such as a LISTING AGREEMENT or BUYER/BROKER AGREEMENT

For NO BROKER-must be disclosed before showing property

FOR TRANSACTIONAL BROKER…unless another relationship has been established IN WRITING… There is no requirement for disclosure

Question 15

How long must a broker retain relationship disclosure documents?

Answer 15

5 years

Question 16

May a SINGLE AGENT relationship be changed to a TRANSACTION relationship? When and how?

Answer 16

YES. It may be changed at ANY TIME.

Requires the principals written consent to change

Buyer, seller or BOTH must sign the “CONSENT TO TRANSITION TO TRANSACTION BROKER” notice required by CH 475 F. S

** if principal REFUSES TO SIGN… continue as single agent!

Question 17

Define the process of a designated sales associate?

Answer 17

In NON RESIDENTIAL TRANSACTIONS where the buyer and seller each have 1M in assets, the broker may designate two sales associates to act as single agents for buyer and seller in that transaction

Both BUYER and SELLER must sign a disclosure notice stating that their assets meet the 1M threshold