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36 Cards in this Set
- Front
- Back
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Common Law |
Law determined based on court cases. |
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Statute |
Written law passed by a legislative body. Legislation on the federal and/or state level. |
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Associated licensee |
Licensee affiliated with and under the supervision of a broker-in-charge or property-manager-in-charge. |
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Team |
Two or more associated licensees working together as a single unit within an office and supervised by a BIC.
**must conduct all real estate brokerage activities from their commission established office under supervision of BIC |
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BIC is responsible for... |
Supervising all licensees, teams, and all members of a team. BIC may not delegate supervisory responsibilities |
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Before a brokerage firm has been hired to represent anyone:
Who is the: Agent Principal Third party/customer |
Agent: associated licensee Principal: BIC/brokerage firm Third party/customer: buyers and sellers |
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Agent |
One hired to represent another.
Associated licensees are agents of the BIC/brokerage firm they are licensed under.
BIC/brokerage is the agent of buyers/sellers that hire the brokerage. |
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Principal (Client) |
One who contracts with another for representation, advice, and counsel in legal or business dealings with third parties.
**in SC law referred to as "client" |
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Types of Principals under Common Law |
1. Disclosed Principal: disclose agency relationship and identity of principal (required by common law)
2. Partially Disclosed Principal: disclose only agency relationship not identity of principal (in situations where buyer needs anonymity) |
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Third Party (Customer) |
The person(s) the agent is trying to do business with while representing the principal/client.
**in SC Law known as a customer |
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Agency Relationship |
Relationship in which an agent is hired by a principal (client) to represent him/her in legal or business dealings with a third party (customer) |
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Customer |
Those who choose to use services of a licensee but do not establish an agency relationship with the brokerage firm and become clients. Nothing is required in writing to establish this relationship. |
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Common Law Obligations to Third Parties |
Honesty and fair dealing Due care Knowledge Skill Disclosing material adverse facts about the property |
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Transaction Brokerage |
Presumed at the time of first substantive contact. A written agreement is not required.
**if a written agreement is used: requires BIC to retain transaction brokerage agreements for 5 years, licensee shall properly complete agency agreement, transaction broker agreement, offer and counteroffer. |
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Fiduciary |
A person holding the character of a trustee and having the duty to act primarily for another's benefit.
Agents are fiduciaries to their principals.
Relationship based on mutual trust and confidence. |
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Agent's Common Law Fiduciary Duties to Principal |
Obedience to lawful instructions Loyalty - client's interests come 1st Disclosure - required regarding anything that could influence their decisions
Confidentiality about client Accounting for money, documents, and property Reasonable care and diligence
** Under SC law confidentiality and accounting outlive the agency relationship. Common Law assumes a licensee will use proper judgement in determine what is confidential, while SC law makes the client ask or instruct the licensee to make certain information confidential that was received during the relationship. |
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4 circumstances allowing disclosure |
1. The client grants written consent to disclose the information
2. Disclosure is required by law
3. Disclosure is necessary to defend the licensee in an investigation
4. The information has become public knowledge from another source |
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List the types of agents |
Universal agent Special agent General agent Subagent Dual agent Designated agent |
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Universal agent |
Can perform all the acts of a principal; created by Power of Attorney ("POA"; a document authorizing one person to act for another)
POA authorizes a person to become the Attorney-in-fact to perform certain acts (e.g. Sign a contract to sell property)
*someone outside of brokerage is universal agent, otherwise that would be a conflict of interest |
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Special Agent |
Agent hired for a specific service with limited authority (does not have continuous service)
E.g. BIC/brokerage is special agent of seller/buyer |
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General agent |
Hired for continuous service therefore has broad authority.
E.g. An associated licensee is a general/subagent of a special agent, his/her BIC
In the case of property managers they are considered general agents when acting for lessors, and special agents if all they are hired to do is find a tenant and get lease signed. |
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Subagent |
An agent of an agent
E.g. When your BIC/brokerage is a special agent , all associate licensees of the firm are subagents = "In-house subagency" |
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A brokerage sells an in-house listing to a third party/customer.
Who is the: Agent Subagent Principal/client Third party/customer |
Agent: BIC/ brokerage firm Subagent: Associated licensee Principal/client: Seller Third party/customer: Buyer |
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A brokerage helps a buyer client buy a FSBO
Who is the: Agent Subagent Principal/client Third party/customer |
Agent: BIC/brokerage Subagent: Associated licensee Principal/client: buyer Third party/customer: seller |
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Dual Agent |
An agent in a real estate brokerage firm represents both buyer and seller clients in the same real estate transaction.
Neither client gets full representation. Same office gets both clients, who could be represented by one or two agents.
SC statute created disclosed dual agency - brokerage must have prior written consent of both clients to act as a disclosed dual agent.
Dual agency as a consideration/not a consideration is required to be mentioned in listing and buyer representation agreements, but Dual Agency cannot be entered until both parties have signed the Disclosed Dual Agency Agreement -- before buyer writes offer and seller accepts offer
** Not allowed under common law |
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Effect of dual agency on licensees duties |
Agents become neutral, not favoring either party. Must disclose material defects about the physical condition of the property.
"Lose OLD"
Agents have duty to disclose relevant information--not including buyer willing to pay more, seller willing to accept less, motivation of either party, personal information (unless authorized in writing), or confidential negotiating strategy
Consenting to dual agency is voluntary
When BIC is involved in transaction it must be Dual (cannot be designated) Agency |
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Designated Agent |
One of the individual associated licensees in a brokerage who is designated by the BIC to represent only one client in a specific "in-house" transaction.
Agent must have prior written consent.
Consideration/no consideration of designated agent will be including in listing and buyer representation agreements, but both parties need to sign Designated Agency agreement before buyer can write offer and seller can accept. |
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Inconsistencies with Common Law of Agency |
Anything in the Agency part of SC license law that is inconsistent with common law supersedes common law. |
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Two types of agencies |
1. Express agency: written, agreeed upon agency
2. Implied agency: an accidentally assumed agency |
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Contracts that create agency relationships |
Written (required by SC Law) Listing agreements Buyer representation agreements Amount brokerage expects to be paid is in contract, unless there is a gratuitous agency (working for free) |
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Types of Listing Agreements |
1. Exclusive right to sell: listing brokerage gets paid if property sells.
2. Exclusive agency: listing brokerage gets paid UNLESS owner sells property
3. Open listing: A property could be listed with many brokerages; No brokerage gets paid if owner sells property without assistance. If a brokerage brings a buyer, only that brokerage gets paid
**net listing: (against SC law and not a type of listing) property owner states amount wanted to "net" from listing, brokerage keeps the remainder |
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Broker protection clause |
"Safety clause"
In listings... obligates seller to pay the commission g the property is sold to a registered buyer after the listing expires. Applies to FSBO, but protection is usually voided if seller lists with another brokerage firm
With buyers... obligates buyer client to pay the agreed fee if the buyer client buys a property (after the agency agreement expires) that the agent had shown or told them about before the agency agreement expired. Signing an agreement with another brokerage firm does not usually void the protection period. |
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Requirements Regarding Brokerage Agreements |
Licensees shall properly complete Agency agreements, transaction broker agreements, offers, and counteroffers
1. Be in writing and set forth all terms 2. Contain description of agents duties or services to be performed for the client. And contain an explanation of office policy regarding Dual, Designated, and Transaction Brokerage if offered by the brokerage firm 3. State amount of compensation to be paid either in the form of a flat fee or method of calculation 4. Explanation of how and when commission is earned 5. Explanation of how compensation will be divided among participating or cooperating brokers 6. Amount of any retainer fees or other money collected before performing a service with details of what happens to the money 7. Specific beginning and expiration dates for Agency relationship 8. Signatures of all parties 9. Clearly state that it terminates on the definite expiration date unless a written extension is signed 10. Type of listing or buyer's representation agreement 11. Exceptions and variations in commission, if applicable 12. Copy given to client at time of signing or directly following. 13. Adequate description of (for buyers) type of property of interest, price/price range for property. (For sellers) legal description of listed property, or description sufficient to identify property, and price of listed property. |
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Creation of Agency relationship with Landlord |
Property management agreement.
Property managers should help owners realize highest profit consistent with owners instructions. |
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Termination of Agency Agreements |
1. Termination by Force of Law: - death or incapacity of principal/client - destruction of the property - loss of title through foreclosure or tax sale - performance/completion - bankruptcy of principal/client or agent
2. Termination by Acts of the Parties - mutual agreement |
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Types of Buyer's Representation Agreements |
1. Exclusive right to represent: buyers Brokerage gets paid if buyer buys
2. Open: buyers brokerage only gets paid if directly involved with the purchase |
