Unit 5-1: Consumer relationships Flashcards
Statute law
laws passed by either federal or provincial govts
Common law
laws made by the courts based on precedents
Quebec system
Civil law used instead of common law; highly structured and rigid code of rules enforced by prov court
Real estate relationships
Non-representation or representation
Non-representation
RE prof. not acting on behalf of that party (client is then known as a customer)
Can only provide factual information, admin support - cannot provide opinions or advice or advocate on their behalf
Representation
Acts for the party involved in the trade - called client
Administrative duties to agreements
Customer acknowledgement form
non-rep relationship; goes to brokerage
Written service agreement
rep. relationship; client
specific services to be rendered
goes to brokerage
5 Ds of Role Clarity and Consistency
Discuss
Determine
Document
Disclose
Do
Types of consumers
Represented with different brokerage
Client already represented by same brokerage (if other party being represented already)
Chooses to be unrepresented
General obligations to consumers
exercise care and skill
act honestly
Liability for customers
if fail to disclose role to them
no authority for acting
causing tort (civil wrong)
Non-rep prohibited services
confidential advice
services that require discretion/judgment
no advocacy or representation
Agency
A legal relationship between two persons; one of whom consents that the other acts on their behalf
Represented party is the principal
Agent is person acting on their behalf
Scope of authority to act
General authority: broad
Specific authority: limited
Three types of authority
Express: oral or written actions of an agent
Implied: do anything related to carrying out express authority
Customary: act in a reasonable manner as is customary to the trade
Limits on authority
Capacity to contract
Capacity to delegate
Capacity to incur expenses
5 elements in representation relationships
creation of law, not intention of parties determines existence of agreement
consensual by written, verbal, implied conduct; relationship ends if consent withdrawn
controlled by principal, agent can’t disagree
fiduciary duties, represent best interests
legal position, legally liable for actions of agent
Establishing representation relationship
agreement
implication
ratification
estoppel
operation of law
Agreement
orally or writing, and actions taken by the parties
oral
no proof
can’t make client understand role
written
residential and property management must be in writing
commercial should be in writing
Commercial real estate exception
doesn’t need a written agreement; but it is encouraged
buy can enter into written agreement in non-exclusive rep.relationship so multiple brokerages can work with them
implication
implied by the conduct of the parties involved
ratification
acts without authority or in excess
estoppel
acting in a way that others think agent has been given authority and principal may not be aware of it
there must be evidence principal gave agent authority
3rd party relies on representation
alteration of 3rd party behaviour based on principal behaviour
Operation of law
agent takes immediate action to save property or prevent danger to principal (agent of necessity)
Obligations to CLIENTS
exercise care and skill
act honestly
negotiate fave terms
maintain confident.
disclose info
act in person
obey law
perform mandate
Sub-agent
acts under the brokerage of original agency
Mandate
authorization to act in a particular way
Fiduciary duties
trust and confidence
best interests
loyalty
basis of the 6 duties:
loyalty
avoid conflict of interest
disclose conflicts
no secret profits
handle confidential info
to account
Disclosure for referral
who is providing compensation for it
how compensation could affect best interests of client
amount of compensation
clients options including disallowing this
Types of brokerage services
mere posting: only lists property
limited: some services
full: all services
prop mgt: operated and maintained
3 methods of termination of representation
mutual consent: both agree
expiry: ends at date specified
completion/performance: ends for the purpose of the rltnshp
unlawful revocation
terminates without consent
may incur liability (damages)
5 methods to terminate rep by operation of law
impossibility: if building destroyed by fire etc
illegality: lose license etc
death: extends to estate instead
mental incapacity: can’t comprehend info
bankruptcy: can’t satisfy financial commitments
