Authorized Relationships, Duties, and Disclosures

Statutory law:

The laws that are currently on record in the country

Transaction Broker

broker who provides a limited form of representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity.

Customer

no fiduciary representation

Brokerage Relationships

- Transaction Broker - Single Agent -No-Brokerage Relationship -Transaction Broker

Single Agent

-Deal honestly and fairly -Account for all funds -Disclose all known material facts -Use skill, care, and diligence -Present all offers and counter-offers -Confidentiality Information received about a client is confidential. The duty of confidentiality remains in place even after the agency relationship with the client has ended. -Obedience Licensees must follow instructions given by clients, as long as they are legal and relevant to the transaction. An agency relationship must be ended if clients ask for anything illegal and refuse to change their instructions after knowing it is illegal. -Loyalty Place the interests of the client above the interests of all others involved in the transaction. -Disclosure full disclosure that extends beyond disclosing material facts. Any information that may affect the sale must be disclosed.

Transaction Broker

-Dealing honestly and fairly -Accounting for all funds -Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer -Presenting all offers and counter-offers in a timely manner, unless a party has previously directed the licensee otherwise in writing -Using skill, care, and diligence in all transactions -Maintaining confidentiality, which is limited confidentiality unless waived in writing. Licensees must not disclose information about a customer's motivations for selling or buying property or the terms on which they are willing to negotiate. They must also not do or say anything to damage either party's negotiating power. -Any additional duties that are entered into written agreement

Positive misrepresentation

1. The false statement or representation of a material fact. 2. The person who falsely represented the material fact was aware of its falsity (or should have been). 3. Another person (reasonably) relied on false information. 4. The person who relied on the false information is harmed.

A. Licensees should continue to present offers and counter-offers until the closing or execution of the lease. The owner/landlord can waive this obligation, but this should be done in writin

According to the NAR Code of Ethics, which statement most accurately describes a licensee's responsibility related to written offers on a listing? A. All formal written offers the licensee receives must be presented to the owner until closing or execution of a lease unless the client waives this obligation in writing.B. All formal written offers the licensee receives must be presented to the owner unless the owner has accepted a previous offer.C. A licensee is only required to present formal written offers that are equal to or more than the listing price.D. A licensee is only required to present formal written offers within a certain range of the listing price of the property.

A. Non representation no-brokerage relationship is also sometimes called non-representation and requires a no-broker relationship disclosure. Option A is the correct answer. The licensee's duties in a no brokerage relationship must be fully disclosed in writing to the buyer or seller prior to the showing of property.

Alison has disclosed, in writing, that she has no brokerage relationship with Zsa Zsa, who is selling her home to her daughter and needs assistance with the sales contract. What type of relationship has Alison established? A. Non-representationB. Contract agencyC. Transaction brokerageD. Sales agency

C. Transaction brokerage The only authorized brokerage relationship in Florida that allows a licensee to represent the buyer and the seller in a single sale (albeit minimally) is transaction brokerage.

Alison is providing limited representation to Jeremy, a buyer, and Susie, a seller, in a single residential transaction. What role has she taken on? A. Limited dual agencyB. General agencyC. Transaction brokerageD. Dual agency

DThis a direct example of a misstatement of a material fact and is therefore an example of a misrepresentation or omission (in this case, a misrepresentation)

Broker Joseph tells his client that a property is zoned as residential, even though he knows it's zoned as commercial. This violation is an example of ______. A. Failing to disclose an agency relationshipB. Misrepresenting or omittingC. Contractual interferenceD. Performing services that qualify as practice of law

C Cara will need proof of the successful completion of her 72-hour broker pre-licensing course within the past two years in order to sit for the broker examination.

Cara has been working as a sales associate in Tallahassee for the last two years and has decided she wants to become a broker. To take the real estate broker examination, what must she do first? A. Activate her license.B. Complete a 60-hour continuing education requirement.C. Complete the 72-hour approved pre-licensing course for a broker license.D. Request exemption from 30 hours of the pre-licensing course.

Customer and clients

D: dealing honestly and fairly, A: accounting for all funds, D: disclosing all known facts that materially affect the value of the property (DAD).

Single Agent

Duties must be fully described and disclosed in writing to a buyer or seller, either as a separate notice or included as part of another document, such as a listing agreement

C. No, because he does not have two years of real estate experience.

Elliott is a 19-year-old Florida real estate sales associate who would like to get his broker's license so he can open his own office. Is he qualified to become a licensed real estate broker in Florida? A. No, because the minimum age for broker licensing is 21.B. Yes, because the minimum age for broker licensing is 18.C. No, because he does not have two years of real estate experience.D. Only if he has completed the required 72 hours of CE.

Special agents

Have limited authority to act on behalf of their clients. Buyer and seller agents are examples of special agents.

General agents

Have ongoing responsibility for all of the dealings related to a specific piece of property. Property managers serve in this role

C. single agent The only role that allows a person to act as a fiduciary in Florida is the role of a single agent

If Alison has agreed, in writing, to represent the fiduciary interests of Bruce, who is ready to buy his first home, she has agreed to act as a _______. A. Transaction brokerB. Seller's representativeC. Single agentD. General agent

transition to transaction broker

If buyers or sellers ask their single agent to switch to the role of a ___, the change in duties owed needs to be fully explained and disclosed in writing.

Designated sales associate

In non-residential transactions, when the buyer and seller each have assets of $1 million or more, they may ask the broker to assign each party a ____ from the same firm.

Code of ethics

National Association of REALTORS® (NAR) Code of Ethics (COE).

Dual agency

One brokerage represents both the buyer and seller. —- is illegal in Florida.

Common law

Procedures that have been set by the precedent of cases that have gone before.term-23

B. Yes, but only if all of the involved parties have full knowledge and provide consent. Licensees can only accept compensation from more than one party with the full knowledge and consent of all involved parties. That compensation must also go through the brokerage firm.

Ricky is working for Matt, a buyer client who is interested in a property at which the listing agent offers compensation to cooperating agents. The listing agent has offered Ricky or any cooperating agent additional compensation if the transaction closes within 40 days. Is this ethical? A. Yes, licensees can receive compensation from multiple parties in the transaction.B. Yes, but only if all of the involved parties have full knowledge and provide consent.C. Yes, but only if the Matt has full knowledge of the compensation arrangement and provides consent.D. No, it's never ethical for a licensee to accept compensation from more than one party.

Single Agent

Single agency means representing a buyer or seller as a fiduciary

C. Stacey is Rebecca's customer Without an agency agreement in place, Stacey is Rebecca's customer. With an agency agreement in place, Stacey would be Rebecca's client.

Stacey, a buyer, is working with licensee Rebecca in a state that doesn't recognize or permit implied agency. Rebecca doesn't represent Stacey, however, and is performing only ministerial tasks for her. Which of these statements about this situation is correct? A. Stacey is Rebecca's client.B. Rebecca is acting in an agency capacity for Stacey.C. Stacey is Rebecca's customer.D. Rebecca can't work with Stacey without an agency agreement.

Single Agent

The disclosure must be made before, or at the time of, entering into an agreement or before the showing of property as a fiduciary, whichever occurs first

C.Misrepresentation can occur without confirmed knowledge. It may be something a licensee should have had knowledge of and investigated.

There are four elements to misrepresentation. These include all of the following EXCEPT ______. A. The fact that the person who falsely represented the material fact was aware of its falsityB. The person who relied on the false information is harmedC. The person who falsely represented the material fact did it innocentlyD. The false statement or representation of a material fact was made

transition to transaction broker

This notice must be given before a licensee or a single brokerage may provide representation to both the seller and the buyer in a single transaction

Termination of agency

Two duties that survive ______ are confidentiality and accounting

D. Buyers may not ask their single agent to switch to the role of a transaction broker. Either buyers or sellers may ask their single agent to switch to the role of a transaction broker; however, the change in duties owed must be fully explained and disclosed in writin

When a licensee is in a no-broker relationship and transitions to a transaction broker role, written consent is not required—so it's not option A. Nor is it required before showing the property or beginning the relationship. However, it is required when the licensee is first a single agent and transitions to a transaction broker, option C. A single-agent relationship may be changed over to a transaction-broker relationship at any time during the relationship, but written consent to transition to the transaction broker role is required.

C. When a licensee is in a no-broker relationship and transitions to a transaction broker role, written consent is not required—so it's not option A. Nor is it required before showing the property or beginning the relationship. However, it is required when the licensee is first a single agent and transitions to a transaction broker, option C. A single-agent relationship may be changed over to a transaction-broker relationship at any time during the relationship, but written consent to transition to the transaction broker role is required.

When must a buyer client give written consent for a licensee to transition to a transaction broker role? A. When the buyer has previously agreed to a no-broker relationshipB. Before a licensee shows any property to the buyer as a fiduciaryC. When the buyer is in a single-agency relationship with the licenseeD. Before a transaction broker relationship may begin

A. Loyalty is owed to clients. Exercising honesty, using reasonable skill, and accounting for funds are duties owed to all parties.

Which of the following is a specific fiduciary duty that agents owe in Florida? A. LoyaltyB. Reasonable skillC. HonestyD. Accounting for funds

D. A licensee can't act as a fiduciary for a buyer and a seller in the same transaction. It is unlawful for a licensee to act as a dual agent in Florida.

Which of the following statements about dual agency in Florida is true? A. A transaction broker may act as a dual agent.B. Dual agency must be disclosed in writing.C. Dual agents are not bound to confidentiality.D. A licensee can't act as a fiduciary for a buyer and a seller in the same transaction.

C. The DAD duties, which are owed in all authorized brokerage relationships, including non-representation, are deal honestly and fairly, account for all funds, and disclose material facts

You've entered into a no-broker relationship with an unrepresented buyer who wants to see one of your listings. What duties do you owe to that customer? A. Use skill and deal honestly and fairly.B. No duties are owed in a no-broker relationship.C. Deal honestly and fairly, account for all funds, and disclose material facts.D. Offer confidentiality, obedience, and loyalty.

D: The acronyms DAD + PUMA may help you remember the seven duties of a transaction broker: dealing honestly and fairly, accounting for all funds, and disclosing all known facts (DAD), as well as presenting all offers and counter-offers in a timely manner, using skill, care, and diligence, maintaining confidentiality, and performing any additional duties (PUMA). Where new licensees may get tripped up on this question is the area of disclosure. Transaction brokers provide limited, not full, disclosure. Option D is the answer that should have been selected.

Your study buddy for the licensing exam tells you that transaction brokers owe the duties of presenting all offers and counter-offers; using skill, care, and diligence; providing full disclosure; and performing any additional duties agreed to in writing. Which of these duties would you point out as incorrect? A. Using skillB. Using careC. Performing additional dutiesD. Providing full disclosure

Client

agency relationship

material fact

could impact the value of the property if the truth were known, or it could cause a seller not to accept a buyer's offer (e.g., the buyer is not financially qualified to complete the transaction).

Client

for whom the agent acts is owed fiduciary representation

Agency

is created by a written agreement between parties, NOT compensation.

material fact

is one that would cause a reasonable person to either not take an action that would otherwise be taken or take an action that would otherwise not be taken.

Self-dealing

is personal interest in a transaction that's not disclosed. It is illegal for a licensee to engage in the brokerage activities of selling or buying a property without disclosing a personal interest in the transaction to all parties.

fiduciary

is someone who has been placed in a position of loyalty and trust.

Client

licensees agree to uphold the fiduciary duties of C: confidentiality, O: obedience, L: loyalty, and full D: disclosure (COLD).

Positive misrepresentation

means intentional, not innocent

No-Brokerage Relationship

must be fully disclosed in writing to the buyer or seller prior to the showing of the property.

No-Brokerage Relationship

no representation. still have duties to potential sellers and buyers (DAD): D:Deal honestly and fairly A: Account for all funds D: Disclose all known material facts

No-Brokerage Relationship

non representation

Transaction Broker

presumed agency and is the only relationship that does not require a written disclosure to be signed.

single agent

represents only one party in the transaction

Designated sales associate

will act as single agents and must uphold the fiduciary duties for the buyer or seller they've been assigned to represent.