Agency

Law of Agency Creation of agency Express agency listing agreement or buyer-agency agreement Implied agency Compensation The source of compensation does not determine agency See book for important definitions Creation of agency Express agency listing agreement or buyer-agency agreement Implied agency Compensation The source of compensation does not determine agency See book for important definitions

Fiduciary Responsibilities Client vs. Customer Care Obedience Accounting Loyalty confidentiality is a big part of loyalty Disclosure See the book for comparison between client-services and customer-services. Client vs. Customer Care Obedience Accounting Loyalty confidentiality is a big part of loyalty Disclosure See the book for comparison between client-services and customer-services.

Termination of Agency Death or incapacity Destruction or condemnation of the property Expiration of the agency agreement Mutual agreement Breach Operation of law Completion, performance, or fulfillment Death or incapacity Destruction or condemnation of the property Expiration of the agency agreement Mutual agreement Breach Operation of law Completion, performance, or fulfillment

Types of Agency Agreements Universal agent – can do everything the principal could do personally General agent – represents the principal in a specific business or project only (property manager) Special agent – represents the principal on one specific project and has no authority to bind the principal in a contract. Must have specific instructions. Designated agent – recent development Universal agent – can do everything the principal could do personally General agent – represents the principal in a specific business or project only (property manager) Special agent – represents the principal on one specific project and has no authority to bind the principal in a contract. Must have specific instructions. Designated agent – recent development

Single Agency Seller or buyer may be principal Subagency – very dangerous and not used much any more Seller or buyer may be principal Subagency – very dangerous and not used much any more

Dual Agency Now the confusion kicks into full gear! In Alabama – limited consensual dual agency Disclosed dual agency Undisclosed dual agency – sometimes created unintentionally through ignorance See Alabama forms See book for examples Now the confusion kicks into full gear! In Alabama – limited consensual dual agency Disclosed dual agency Undisclosed dual agency – sometimes created unintentionally through ignorance See Alabama forms See book for examples

Customer-Level Services Reasonable skill and care in performance Honest and fair dealing Disclosure of all facts that the licensee knows or should reasonably be expected to know that materially affect the value or desirability of the property Do you see any potential problems or judgment calls? Reasonable skill and care in performance Honest and fair dealing Disclosure of all facts that the licensee knows or should reasonably be expected to know that materially affect the value or desirability of the property Do you see any potential problems or judgment calls?

Some Things to Consider Opinion vs. fact puffing fraud negligent misrepresentation A contract obtained by fraud can be disaffirmed or renounced by the purchaser Latent defects – sellers can be liable for damages if they don’t disclose – see book Stigmatized properties – be careful! Opinion vs. fact puffing fraud negligent misrepresentation A contract obtained by fraud can be disaffirmed or renounced by the purchaser Latent defects – sellers can be liable for damages if they don’t disclose – see book Stigmatized properties – be careful!