Brokerage Relationships and Ethics

15 terms by arlinemarin

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Key Terms

agent

An agent is the person entrusted with another's business. An agent is authorized to represent and act for his or her principal.

customer

Chapter 475 defines customer to mean a member of the public who is or may be a buyer or a seller of real property and may or may not be represented by a real estate licensee in an authorized brokerage relationship.

designated sales associates

In a real estate transaction other than a residential sale, as defined in Chapter 475, and where the buyer and seller each have assets of $1 million or more, the broker at the request of the buyer and seller may designate two sales associates to act as single agents for the buyer and seller in the same transaction. The two sales associates in such an arrangement are referred to as designated sales associates.

dual agent

The term dual agent means a broker who represents as a fiduciary both the prospective buyer and the prospective seller in a real estate transaction.

fiduciary

A fiduciary relationship is created when a real estate broker accepts employment as a single agent of the seller or the buyer. Florida real estate license law prohibits a broker from creating a fiduciary relationship with both the buyer and the seller.

fraud

The elements of a cause of action for fraud are: (1) the licensee made a misstatement or failed to disclose a material fact, (2) the licensee either knew or should have known that the statement was not accurate or that the undisclosed information should have been disclosed, (3) the party to whom the statement was made relied on the misstatement, and (4) the party to whom the statement was made was damaged as a result.

general agent

A general agent is authorized by the principal to perform only acts related to a business or to employment of a particular nature. A property manager, for example, acts as a general agent if he or she is authorized to show and rent apartments, collect rents, supervise maintenance and upkeep of the property, handle tenant relations, and perform bookkeeping duties.

misrepresentation

Misrepresentation is the misstatement of fact or the omission or concealment of a factual matter. Misrepresentation can lead to fraud.

principal

The term principal is used to mean the party with whom a real estate licensee has entered into a single agent relationship.

residential sale

A residential sale is defined as 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 ten or fewer acres.

single agent

The Florida real estate license law defines a single agent as a broker who represents, as a fiduciary, either the buyer or the seller, but not both, in the same transaction.

special agent

A special agent is authorized by the principal to handle only a specific business transaction or to perform only a specific act. If you hire a certified public accountant (CPA) to prepare your tax return and, if necessary, to answer any inquiries from the IRS concerning the tax return, the CPA is acting as a special agent for you (the principal). A real estate licensee may act as a special agent with buyers or sellers. This occurs when the buyer or seller and the brokerage firm enter into a single agent relationship. The broker agrees to represent the buyer or seller with regard to a single business transaction. Not all real estate brokers act as agents of buyers and sellers.

subagents

If a single agent (the broker) uses the assistance of other agents, these individuals are called subagents. Subagents are persons authorized to assist and represent the agent.

transaction broker

A transaction broker is a broker who provides limited representation to a buyer, a seller, or both in a real estate transaction, but who does not represent either party in a fiduciary capacity or as a single agent.

universal agent

A universal agent is authorized by the principal to perform all acts that the principal can personally perform and that may be lawfully delegated to another. An attorney who manages the trust agreement of a mentally retarded adult is a universal agent for his or her client (the principal). Duties of the attorney-agent would include, for example, overseeing the principal's financial affairs, medical care, employment opportunities, and living arrangements.

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