A property management contract creates an agency relationship between which two parties?

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What creates an agency relationship?
What are the two basic elements required to create an agency relationship?
What are the types of agency relationships?
What is the relationship between an agent and the principal?

A	B
Types of agreements that create agency contracts	1. Listing 2. Property/Association Management Agreement 3. Buyer Agency Agreement (3a. Buyer Brokerage Agreement 3b. Licensee affiliating with a broker)
These create an agency relationship (list)	1. A written contract 2. Actions of the parties --Money does NOT create agency--
In order to earn a commission, agent must: (list)	1. Be licensed at the time of the transaction 2. Have a written compensation agreement 3. Be the procuring cause of sale
Procuring cause	The broker provided a service, creating events which, began an uninterrupeted chain of events that eventually resulted in the sale. The broker who has this is the one entitled to the commission
Ways licensee can support procuring cause claim	1. Having shown the property 2. Followed through and communicated 2. Provided a service that created events which, without a break in continuity, contributed to the sale
Procurring cause in an open listing	Here, the broker who is the effective cause of sale gets commission. Can even be indirectly that their efforts cause a sale
2 Types of Agency (re: Communication types)	1. Express 2.Implied 3. Ostensible (type of implied)
Express Agency:	When the parties to the agency agreement have deliberately entered into the relationship and have stated the contract's terms and communicated their intention, either orally or in writing
Example of an express agency relationship agreement	Listing agreement
Implied Agency:	Type of actual agency that arises unintentionally between 2 parties when the actions or conduct of the parties communicate that there is an agreement. When broker (agent), through their words or actions, leads a buyer to feel that the broker is acting on their behalf, when that is not the broker's intention. Illegal in GA
Ostensible Agency / Agency by Estoppel	Actual agency relationship that arises out of actions rather than expressed agreement with 3 parties. When one party leads a second party to believe a third party represents them. The third party relies on principal's expressed or implied representation that a particular party is their agent, even though no such agreement ever existed. Called this bc on the surface an agency appears to exist. Once it's created, owner is prevented (by estoppel) from denying its existence. Illegal in GA
Estoppel	A doctrine of law which prevents a person from exercising rights that are not consistent with their prior conduct or words. In ostensible agency, it prevents creator from denying its existence
Gratuitous Agency	Agent agrees to work for no compensation (like to sell family member's home). Lack of compensation doesn't relieve agent of their fiduciary duties
Types of Agents (list)	1. General Agent 2. Special Agent 3. Universal Agent
General Agent	Agent type when principal delegates a broad range of powers and the relationship is expected to be ongoing. Has the authority to bind the principal in the on-going conduct of a business.
Example of a General Agent	Examples of this type of agent are: a property manager to landlord or a real estate agent with the agent's broker
Special Agent	Agent type when the principal delegates a specific act or business transaction. 1 thing; 1 time. Appointed only for a specific purpose or to act on a particular occasion. Limited authority
Authority of Different Types of Agents (rank)	1. (Most) Universal Agent 2. General Agent- broad authority 3. Special Agent- limited authority
Universal Agent	An agent type where agent is given full power of attorney to represent another person. Authorized to perform any lawful act the principal's could perform
Example of a Special Agent:	An example of this type of agent is a broker authorized by a seller to find a buyer for the property. Also could be for a listing agent or party with a durable power of attorney; an agent who entered into a buyer's agency agreement
Example of a Universal Agent	An example of this type of agent would be a guardian of a minor or incompetant having the authority to represent them in lawful manners
Types of Agencies (list) -- ways they can represent the buyer or tenant	1. Single Agency 2. Dual Agency 3. Facilitator or Transaction Broker 4. Designated Agency
Single Agency	When a broker is representing either the seller or the buyer in the transaction, but not both
Dual Agency (Limited Agency)	Representing both the buyer and the seller (both principals) in the same transaction. Violates license law unless both parties give their written consent BEFORE offer is written and submitted. Some states prohibit this--seller can only keep working with both parties as a transaction broker
How to avoid violating license law when entering into Dual Agency	By both partied giving their written consent BEFORE an offer is written and submitted
If state prohibits dual (limited) agency, what is licensee's option for continuing to represent the two parties (if any)?	In states prohibiting this, licensee can only continue to represent both parties as a transaction broker
Problems with Dual Agency	Bc of fiduciary relationships, conflict can happen if broker represents both seller (who wants highest price) and buyer (who wants lowest price)
Transaction Broker	A non-agency relationship when agent doesn't represent either party (buyer or seller) in a transaction. Both parties are treated as customers. Aka facilitation; non-agency relationship
Facilitator	A real estate licensee who assists buyer and seller in reaching an agreement in a real estate transaction but doesn't have an agency relationship with that party (both parties treated as customers)
Designated Agency	Agency relationship created when an agent is appointed by a broker to act for a specific client or principal. 2 agents in same brokerage represent both parties, rather than one agent representing both (like in dual agency) Used when one agent with the company listed the property and another on in the company secured the buyer for it. Can only occur with written consent of both parties. Both parties are clients. Created as an attempt to avoid dual agency for in-house transactions
Agency	The relationship created when one party (principal) hires/delagates to another (agent) the right to act on their behalf in business transactions and to exercise some sort of discretion while doing so. Creates a fiduciary relationship
Agency Agreement	Essentially an employment contract between principal (client) and agent (brokerage)
Principal (Client)	In a fiduciary relationship, this is the person who hires/authorizes the agent to act on their behalf/represent them in the sale of their property.
Agent	In fiduciary relationship, the one performing the action/ is authorized to act on behalf of another person/ entity. In RE transaction, the brokerage firm is hired as the agent
Third Party (Customer)	The one with whom the agent interacts, if not the client
Selling Agent	The buyer working with the buyer, regardless of whether they have entered into an agency agreement
Fiduciary relationship	A position of trust and confidence. Created when an agency relationship between broker and client. Agent obligated to protect and promote the best interest of their client at all times; provide the highest standard of care; must always act for the sole benefit of the principal
Sales associates hold fiduciary relationship with:	Their brokers. They represent their brokers and this is who their primary fiduciary relationship is with
Relationship when licensee is representing the seller as an agent or sub-agent	Seller= client; buyer= customer
Relationship when licensee is representing the buyer as an agent	Buyer= client; Seller= customer
Listing Agreement	A personal service contract securing the employment of a brokerage firm to find a ready, willing, and able buyer. 5 types (exclusive-right-to-sell; exclusive-agency; open; net; and option
Types of listing agreements	1. Exclusive-right-to-sell 2. Exclusive-agency 3. Open Listing Agreement 4. Net Listing Agreement 5. Option Listing Agreement
Responsibilities of an Agent (Duties of the agent to the principal) acronym:	COALD
COALD (list)	Represents the duties of the agent to the principal. Broker must act with: 1. Care 2. Obedience 3. Accountability 4. Loyalty 5. Disclosure
Duties of Agent to Principal: C. Care	Broker is to exercise reasonable care and skill as a professional while transacting business w the principal
Duties of Agent to Principal: C. Care --> For a client seller	1. Establishing the correct list price 2. Properly representing the property 3. Delivering appropriate forms and documents needed in the transaction 5. Properly marketing the property
Duties of Agent to Principal: C. Care --> For a client buyer:	1. Helping the buyer find suitable property 2. Negotiating the offer 3. Directing the buyer to a lender and other experts for advice
Duties of Agent to Principal: O. Obedience	Agent is to act in good faith and obey the principal's instructions given in the contract (except if illegal)
Duties of Agent to Principal: A. Accountability	Agent is accountable for all funds or property of others that come into the agent's possession
Duties of Agent to Principal: L: Loyalty	Agent must be loyal, putting the principal's interests above those of all others.
Duties of Agent to Principal: L: Loyalty	This duty includes: 1. obtaining the best offer from a buyer when representing a seller 2. Explaining offers to a client 3. Representing only the interests of the client
Duties of Agent to Principal: D: Disclosure	Agent must keep the principal informed, disclosing all facts and info that could affect the transaction
Duties of Agent to Principal: D. Disclosure includes:	If representing the seller, the agent must disclose if the buyer is willing to offer more for the property. If representing the buyer, agent needs to disclose all defects and if the seller would take less for the property
Agents fiduciary duties to the principal:	Agent must use reasonable care and skill in performance, be honest, and disclose all facts that affect the value of the property, regardless of whom they are representing
If agent breaches fiduciary duty to the principal:	Agent will not be entitled to a commission and may be additionally liable for actual damages
Ministerial Acts	Those acts that a licensee may perform for a consumer without creating an agency. These are considered informative in nature- they don't require judgement and don't amount to advising, counseling or active representation
Ministerial acts include:	1. Showing properties that might fit their needs 2.Making factual representations about a property's condition 3. Providing information about comparable sales 4.Pointing out neighborhood amenities 5. Providing information about schools, utilities, taxes, etc 6. Locating lenders, surveyors, attorneys, etc if needed 7. Preparing and presenting offers
Puffing	Exaggeration of fact which a reasonable person would recognize as untrue. Not considered misrepresentation

What creates an agency relationship?

An agency relationship is created when one person (the principal) consents to another person (the agent) acting on his behalf, subject to the P's control, and the A agrees to do so. Agency most often comes up in relationship to business matters of some sort. At common law this relationship was called “master-servant.”

What are the two basic elements required to create an agency relationship?

Consent: Consent of both the principal and the agent is necessary to form an agency relationship. More specifically, both the principal and the agent must consent to the agent acting on the principal's behalf and subject to the principal's control.

What are the types of agency relationships?

The most common agency relationships are: Buyer's Agency; Seller's Agency; Dual Agency..

the terms of the agreement between the parties; and..

extent of the authority conferred and..

the fiduciary obligations to the principal..

What is the relationship between an agent and the principal?

A principal-agent relationship describes the relationship between a business or individual and someone hired by that business or person to act on their behalf. The principal is the business entity (or hiring individual), while the agent is the entity hired to act on behalf of the principal.

A property management contract creates an agency relationship between which two parties?

What creates an agency relationship?

What are the two basic elements required to create an agency relationship?

What are the types of agency relationships?

What is the relationship between an agent and the principal?

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