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This is different from general agency in that:

-A general agent might have broad authority to act, but regarding ONLY a specific business concern of the party. -A universal agent has the scope of authority to act on the party's behalf for ALL business concerns.

The principle that agency relationships are created at the broker level has a number of implications, such as:

-Commission: The commission rate is negotiated between the party and the broker. -Listings: If a sales associate switches brokerages, the parties the licensee was working with before the switch remain with the sales associate's former sponsoring broker.

Express Agency

-Express agency can be created in written or oral form. Both forms are considered valid, with the written form offering more clarity and protection for both parties. In either case, express agency is created when a party explicitly appoints an agent to act on their behalf. -Express agency is the most popular (with reason) way that agency is created.

Consent

-Ideally, an agency relationship is created as the result of the mutual consent or agreement between the agent and the party they will represent. -It's important to note that both the agent AND the party to be represented must give consent to the agency relationship.

Compensation ≠ Agency Relationship

-It should be noted that in real estate, compensation does NOT equal agency representation. A broker can potentially be compensated by a number of different people: -The party they represent -The party on the other side of the transaction -Another source -Or some mix of the above It is more common, for example, that a buyer's agent would receive compensation from the seller (via the proceeds from the property sale) than from the buyer directly.

The best tools used to express express agency

-Listing agreement -Buyer-representation agreement

Actions that often fall under a broker's special agency include such things as:

-Listing the party's home on the MLS -Showing the party's home to potential buyers -Representing the party's interests as a buyer at an open house

Agency can be created:

-Orally -In writing -By implication or action But while that is true, it bears repeating that it is best to create agency in writing. This can happen at different points during the relationship timeline, but it is always best to get it in writing as early as possible.

Binding or Not?

-Special agency ≠ binding authority -General agency = binding authority

Universal agency is:

-The broadest form of agency -Uncommon in real estate; and, when needed, -Usually be granted via a general power of attorney

Agency can be created in a number of ways and at different points of time in a relationship. Agency can be described in terms of:

-The manner in which it is created -The degree of authority and liability it brings -The form that it takes

Information that is placed on record with the Department of Business and Professional Regulation includes:

-The name and address of each licensed broker and sales associate -The name and business address of each sales associate's employer (meaning their sponsoring broker) -The sales associate's and broker's license status (active or inactive) -The person's involvement as an officer, director, or partner of a real estate business

Here are the roles each plays in that general agency relationship:

-The sponsored licensee is the general agent of the broker. -The broker is the party represented by the sponsored licensee.

Certain Agency Relationships = Fiduciary Relationships

-The term fiduciary speaks to the highest level of trust that is expected in certain relationships — particularly those having financial implications.

General Agency vs. Special Agency

-This means general agents enjoy broader authority than special agents but less authority than universal agents. -Not only is scope of authority broader for general agency than special agency, but the two agency classifications also differ in that general agency is often ongoing. -Special agency tends to be for one, specific objective that usually has an end date.

Creation of agency requires two essential components:

1. Consent 2. Control

General Agency in Property Management. License holders operating as property managers also require general agency to carry out their duties for a couple of reasons:

1. Their duties are ongoing and multifaceted within their area of concern, so they need a wider scope of authority. 2. They typically have the power to bind the principal (property owner) to rental agreements and other needed contracts.

Which of the following is an example of a general agency relationship?

A broker and a sponsored licensee

The Customer

A customer is an individual with whom a licensee has no fiduciary duties but to whom a lesser degree of duty is owed. At the very least, all parties are owed the duties of: -Accounting -Honesty and fairness -Disclosure of a property's observable material facts that are not readily observable

The Fiduciary

A fiduciary is an individual upon whom is placed the highest levels of trust and confidence when acting on behalf of another. So serious are the obligations of agents acting as fiduciaries that they are expected to put their client's interests ahead of anyone else's — including their own. You might say, then, that a fiduciary is an agent on steroids

General Agency

A general agent is one who is authorized to manage all of a party's affairs within certain specified areas.

Customer

A party outside of the principal-agent relationship.

Agency Relationship

A relationship wherein one party authorizes another to represent their interests and that second party accepts the responsibility given to them.

Special Agency ≠ Binding

A significant limitation in special agency relationships is that special agents are unable to make decisions that would bind or obligate the party they represent.

If a Florida licensee violates their duties, the violation could result in license suspension or revocation, or a penalty (per occurrence) of up to what amount?

A violation of the duties of a licensee in Florida could result in suspension or revocation of license or a penalty, per occurrence, up to $5,000.

Mutual Consent Required

Agency relationships require the mutual consent of both parties (the agent and the client or customer), and it is usually entered into by one of two methods Written agreement or Oral agreement

The Agent

Agent is an individual with authority to act on behalf of another.

Special agency

Aka limited agency, restricts an agent's scope of authority to one or more specific acts as directed by the party — usually towards a single, specific objective, end, or goal. Special agency is the most limited in scope.

Principal

Also known as a client, an individual who authorizes another to act on their behalf

Agent

An individual who has been authorized to act on another's behalf.

Statutory laws

Are those laws that are introduced at the state or federal level. In Florida, the laws enacted by state legislature that pertain to real estate licensure, and the use of agency within real estate, are found in Title XXXII, Chapters 455 and 475. (You'll become more acquainted with these statutes as you progress through this course.)

Which of these is NOT a way in which agency can be created?

By Force

Common Law

Can be traced back to customs and precedent established by court decisions over the centuries in England, long before the creation of the U.S. as a country.

Caveat Emptor

Caveat emptor is the concept that a buyer is responsible for verifying the quality and value of the goods prior to the purchase, including real estate.This means we act with a degree of caution or care when we come into contact with someone we consider an adversary or, at least, someone with interests that are counter to our own.

Administrative law

Comes about as result of one or more state statutes giving rise to authorized administrative bodies created to regulate or govern areas of concern for the state.

Which of the following is not a building block or necessary component of agency creation?

Compensation

What is required for an agency relationship to form?

Consent of an agent and the client or customer

Control

Control has to do with the idea that the agent (broker or sponsored sales associate) has authority to act on behalf of the customer or client. Written agreements, contracts, and forms all contribute to the support and clarification underlying this concept of control. That said, a certain degree of control can be exercised without written agreements or documentation in place.

Per Florida statute, "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 in an authorized brokerage relationship" is the definition of a(n):

Customer

Fiduciary relationships are often those having:

Financial implications The term fiduciary speaks to the highest level of trust that is expected in certain relationships — particularly those having financial implications.

General Agency

General agency, while somewhat limited, grants a broader scope of authority to the agent than does special agency. It is often ongoing in nature. It is the type of relationship that exists between brokers and sponsored licensees, and it is also the classification of agency needed for a licensee to work as a property manager.

Sales Associate Andie's supervising broker is Geni. In their general agency relationship, who is the party being represented?

Geni. In this general agency relationship, Geni is the party being represented, and Andie is the general agent, acting on Geni's behalf. By authorizing Andie as her general agent, Geni is responsible for the approved actions taken by Andie.

The Client (Principal)

In most states, anyone represented by a real estate agent would be considered a client of that agent. Not so in Florida. In Florida, agents operating as agents have customers while agents operating as fiduciaries have clients, also known as principals.

Subagents

In simplest terms, these would be agents of an agent. In Florida, this term is confined to any sponsored sales associates and sponsored associated brokers who work with parties on behalf of their employing broker.

Liam would like Hannah to represent him, not only in all of his business affairs but also in all of his personal affairs. To give her complete freedom to act in his name, including the authority to bind him to contracts, Liam signs a power of attorney. What kind of agent does Liam want Hannah to be for him?

Liam wants Hannah to represent him in all of his business and personal affairs. And he has signed a power of attorney, giving her the legal right to do just that. This is an example of a very broad scope of authority that is ongoing and has power to bind. Liam wants Hannah to operate as a universal agent. Next Page

Universal Agency in Real Estate

One possible scenario in which a party may employ universal agency is if the party is abroad and while trying to sell their home. They may want to give their agent power of attorney to complete the sale of their property in their absence.

A special agent's scope of authority is narrow and usually:

Short term

From the customer or client's perspective, what kind of agent is their broker?

Special Agent

Special Agency

Special agency is the limited form of agency typical of that which exists between brokers and their customers or clients. It's used to carry out one specific objective, but might entail a variety of tasks in order to fulfill that objective. Special agents cannot make decisions that may bind or obligate the parties they represent.

Sales Associate Steve convinces Prospective Seller Tamara to sign a listing agreement. Tamara's contract is with:

Steve's sponsoring broker

Sales Associate Peyton is sponsored by Broker Archie. In that relationship, Peyton is a(n) to Archie's customers and clients:

Subagent

General Agency in Real Estate

The classic example of a general agency relationship is the relationship between a broker and a sponsored licensee.

Power of Attorney

The extremely broad scope of authority that comes with universal agency makes it a rare occurrence. When it is employed, universal agency is usually granted to an agent via a power of attorney — a legal instrument used to confer the right of one individual to act on behalf of another.

Special Agency in Real Estate

The relationship between real estate brokers and the parties they represent will almost always be a special agency relationship, with the single, specific goal being the sale or purchase of a property.

Relationship Components

There are three components to an agency relationship: -Two parties (agent and client/customer) -An agreement -A duty

Dual Agents

These are licensees who operate as fiduciaries for both sides of an in-house transaction. This is illegal under any circumstance in Florida residential transactions! The state does not condone this type of representation as it feels that the complete loyalty demanded of a fiduciary cannot be offered to two parties with competing interests when they are being represented by the same firm.

Universal Agency

Universal agency is the type of agency that gives agents the broadest scope of power. It empowers agents to make decisions on behalf of those they represent across a wide range of concerns. It is rarely used in real estate.

Universal agency is usually granted via a(n):

Universal agency is usually granted via a power of attorney.

Anthony is Joe's agent, operating as the property manager of the luxury apartment building Joe owns. Anthony's responsibilities are ongoing and have binding power on Joe. What kind of agent is Anthony?

general agent

Universal agency

is the most broad type of agency. Universal agency gives agents the power to act on behalf of the party AND make decisions on behalf of the party in all business matters of concern.