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Brokers' Relationship Disclosure Act

Terms in this set (21)

Written or Expressed Agency: is created when a written or oral contract is entered into where the parties state the intent of their relationship in a contract. In such a contract the seller could hire a broker to list, show, advertise and sell a property and in exchange, the seller will pay the broker a certain amount of money or a percent of sale. Usually the contract is in writing with specific terms to comply with the Statute of Frauds* to prevent misunderstanding.
Implied Agency : is created by the Act of the Parties. In other words, the acts or conduct of the parties involved indicate that they have a relationship. The clearest example of this type of agreement is when a person hails a taxi, gets in the taxi, tells the driver where he wants to go and the driver takes him there. The clear indication is that the driver and the passenger have an implied relationship that the driver will drive and the passenger will pay. This type of agency by the acts of the parties is sometimes difficult to prove and difficult to sustain since there are no clear written rules.
Ratification of Agency : is always created after the fact. The principal accepts the conduct of a person who acted without prior authorization as the principal's agent, such as a licensee who shows a property without a current listing agreement and then the seller agrees to work with the person (creating an agency) to sell the property. This type of agency relationship is very difficult to prove, and may have other legal problems.
* Statute of Frauds: is an old English statute passed in 1677 which has been adopted in almost all of the United States . Its purpose is to prevent fraud among the parties by requiring that all contracts be in writing, and signed by all the parties to be charged. This will be covered more in contract law.
A transaction broker means 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. Chapter 475 defines a "customer" as a member of the public who is or may be a buyer or seller of real property and may or may not be represented by a real estate licensee. Either buyer or seller is a "customer" when he chooses a limited representation under Transaction broker status.
Duties include:
Deal honestly and fairly
Account for all funds entrusted to the broker
Use skill, due care and diligence in the transaction
Disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer
Present all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing
Provide limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, or the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or any other information requested by a party to remain confidential.
Provide any additional information that are mutually agreed to.
Under Florida law, customers are not responsible for the acts of a transaction broker, and licensees will not work for one party to the detriment of the other.
Occasionally, for a variety of reasons, it becomes necessary for a single agent to become a transaction broker. This change can be made at any time during the relationship between an agent and principal, provided the agent gives the transition disclosure and the principal consents to the transition before a change in the relationship.
Suppose that a single agent represents the seller in the transaction. That single agent finds the buyer for the property. In order to treat both parties fairly, he asks the seller's permission to switch to a transaction broker. The seller agrees and then the broker must file the correct paperwork.
To be in order, the single agent must have made the single agent disclosure before, or at the time of entering into a listing agreement or an agreement for representation or before showing of property, whichever occurs first.
To make the transition he must use the Transition format, in its correct form and correct information. (See the sample form on the next screen). The disclosure must be in writing either as a separate and distinct disclosure or included as a part of another document such as listing agreement or other agreement for representation. When incorporated in other documents, the required notice must be of the same type or larger, as other provisions of the document and must be conspicuous in its placement so as to advise customers of the duties of a Transaction agent, except that the first sentence of the disclosure must be printed in uppercase and bold type.
The single agent notice and no brokerage relationship notice must be explained to the person to whom it applies - however; these forms are not required to be signed by the parties if they refuse. The consent to transition to transaction broker form MUST be signed by the principal/client when implemented.