Broker. Brokerage Relationships. Chapter 10. Copyright Gold Coast Schools 1
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1 Broker Chapter 10 Brokerage Relationships 1
2 Learning Objectives Distinguish between the terms general agent and special agent Describe which legal provisions apply only to residential real estate transactions Describe the duties and disclosure requirements of a transaction broker Describe the duties and disclosure requirements that single agents have to their principals 2
3 Learning Objectives Define a dual agent Describe the purpose and requirements of the no brokerage relationship notice List the no brokerage relationship duties Describe the process of transition from a single agent to a transaction broker Identify the actions that will terminate a brokerage relationship 3
4 Law of Agency Two types Common Law Custom and court decisions Statutory Law Legislature Florida Real Estate Commission (FREC) has rules that affect agency relationships. 4
5 Types of Agents An agent is a person entrusted to represent another. The three types are: Everything One Business One Transaction Universal Agent General Agent Special Agent 5
6 Brokerage Relationship Options No brokerage Single agency Transaction brokerage Dual agent Illegal in Florida represent both the buyer and seller in the same transaction as a single agent (fiduciary relationship) 6
7 Residential Transactions 4 or fewer units Vacant land intended for 4 or fewer units Agricultural property of 10 acres or less Required written disclosures for single agency and no brokerage not transaction brokerage 7
8 Exceptions to Residential Disclosure Requirements Buyer or seller already represented bona fide open house Casual meetings that do not involve confidential information Responding to factual questions Licensees at a new construction site Wearing I.D. badge with company name Rental or leasing or property Unless option to purchase for property classified as residential 8
9 Fiduciary Relationship Mutual Trust and Confidence Between a broker (agent) and sellers or buyers (principals), When accepted as a part of single agency The opposite of dealing at Arm s Length (Caveat Emptor). 9
10 Timing of Brokerage Disclosure No Brokerage (nonrepresentation) In writing before showing property Single agent In writing At the time of listing Agreement for representation Showing property Whichever occurs first Transaction broker Presumed brokerage relationship Written disclosure not required 10
11 Recordkeeping Requirements 5 years Written brokerage relationship disclosures Written Purchase and sale contracts Nonresidential designated agency contracts Escrow documents All other documents Including written contracts and all documentation for fall-throughs May be stored in digitized format 11
12 Single Agent Relationship Principal Person who delegates authority to another Agent/licensee Person entrusted with another's business Who is authorized To represent Act for the principal Represents the buy or seller not both Buyer or seller referred to as principal/client Principal is responsible for the actions and statements of the licensee 12
13 Transaction Brokerage Relationship Customer Buyer or seller Key: limited representation Customer is not responsible for the actions or statements of the licensee May represent the buyer and seller in the same transaction 13
14 No Brokerage Transaction Broker Single Agent Honesty & Fairness Account for All Funds Disclose Known Facts (Residential) Skill, Care & Diligence Present All Offers and Counter Offers Limited Confidentiality Confidentiality (Full) As Agreed Gold Coast Schools Obedience Loyalty Disclosure (Full) 14 14
15 Transition to Transaction Broker Change from single agent to transaction broker Requires written consent Prior to transition Signed by the principal(s) Signatures Recommended for all disclosures Required for Transition to Transaction Broker 15
16 Designated Sales Associate Broker assigns One sales associate to represent as a single agent the seller One sales associate to represent as a single agent the buyer In the same transaction. 16
17 Designated Sales Associate Requirements Non-residential only Both parties Must request Assets in excess of 1 million dollars 17
18 Terminating Agency Relationship Terminated by: Fulfillment of agency purpose Mutual agreement Expiration of term Agent renunciation by giving notice to principal Revocation by principal Death Destruction of the property Bankruptcy 18
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