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New York Real Estate for Salespersons, 5th e. By Marcia Darvin Spada , Cengage Learning. Chapter 2. Part I Law of Agency. Chapter 2 Key Terms. Accountability Advance informed consent to dual agency Agency disclosure form Agent Broker ’ s agent Buyer ’ s agent Client Confidentiality

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New york real estate for salespersons 5th e

New York Real Estate for Salespersons, 5th e

By Marcia Darvin Spada,

Cengage Learning

Chapter 2 Part I Law of Agency


Chapter 2

Chapter 2

Part I Law of Agency

Chapter 2 Part I Law of Agency


Chapter 2 key terms
Chapter 2 Key Terms

Accountability

Advance informed consent to dual agency

Agency disclosure form

Agent

Broker’s agent

Buyer’s agent

Client

Confidentiality

Cooperating agent

Customer

Designated agent

Disclosure

Dual agent/dual agency

Estoppel

Exclusive agency

Exclusive-right-to-sell

Express agency

Fiduciary/fiduciary duties

First substantive contact

Chapter 2 Part I Law of Agency


Chapter 2 key terms continued
Chapter 2 Key Terms (continued)

General agent

Implied agency

Informed consent

Loyalty

Misrepresentation

Obedience

Open listing

Principal

Reasonable skill and care

Self-dealing

Seller’s agent

Single agent

Special agent

Subagent

Undisclosed dual agency

Undivided loyalty

Vicarious liability

Chapter 2 Part I Law of Agency


Agency relationships
Agency Relationships

Agent

Principal

Customer

Chapter 2 Part I Law of Agency


Broker ethics fiduciary responsibilities
Broker EthicsFiduciary Responsibilities

Obedience

Loyalty

Disclosure of information

Confidentiality

Accountability

ReasonableCare, Skill, and Diligence

Chapter 2 Part I Law of Agency


Duties of the principal to the agent
Duties of the Principal to the Agent

The agent should not be liable if the principal

withholds information that causes the agent to make incorrect representations to third parties

Agents should expect honest disclosure from customers

Chapter 2 Part I Law of Agency


Misrepresentation
Misrepresentation

  • A false representation of a material fact

  • A person making the false representation knew or should have known it to be false

  • A person acts or does not act based on the misrepresentation

  • A person who relies on the misrepresentation in acting or not acting

Chapter 2 Part I Law of Agency


Latent defects
Latent Defects

  • Hidden or concealed defects that cannot be discovered by ordinary examination or inspection

  • Buyers may accuse the inspector of failing to notice the problem

  • A leaky sewer pipe may cause damage to a number of property components

Chapter 2 Part I Law of Agency


Creation of agency
Creation of Agency

AGENCY

AGREEMENT

Express

Oral or written

Implied

Actions of the parties

Chapter 2 Part I Law of Agency


Types of compensation
Types of Compensation

Chapter 2 Part I Law of Agency


Multiple listing services
Multiple Listing Services

  • Advantages

    • Greater exposure for a listed property

    • Better price range due to a wider market

    • Property information online and updated regularly

  • Disadvantages

    • MLS charges a fee for its service- every broker or agent who accesses the service must pay

    • Courts have challenged MLS for only letting real estate board members become members

    • Listings are sold through a broker from another firm which because of the split reduces the commission

Chapter 2 Part I Law of Agency


Broker ethics and antitrust laws
Broker Ethics and Antitrust Laws

Federal Antitrust

Laws and Agencies

Sherman Act (1890)

Clayton Act (1914)

Federal Trade

Commission

U.S. Dept. of Justice

Chapter 2 Part I Law of Agency


Types of restraints of trade
Types of Restraints of Trade

Price fixing

Group boycotts

Market allocation agreements

Tie-in arrangements

Chapter 2 Part I Law of Agency


Agency alternatives
Agency Alternatives

Broker’s agent

Buyer Agent

Cooperating agent

Designated agent

Dual Agency

Seller agent

Single agent

Subagent

Chapter 2 Part I Law of Agency


Definition of dual agent
Definition of dual agent

An agent who is acting as a buyer’s agent and a seller’s agent in the same transaction

Chapter 2 Part I Law of Agency


Dual agency
Dual agency

Designated

agent

Consensual/

Informed consent

Undisclosed

Intended

Unintended

Chapter 2 Part I Law of Agency


Designated agent definition
Designated Agent Definition

A salesperson or associate broker, working under the supervision of a real estate broker, who has been assigned to represent a client when a different client is also represented by such real estate broker in the same transaction

Chapter 2 Part I Law of Agency


Designated sales associate
Designated Sales Associate

The designated sales associate and representative broker cannot provide the fiduciary duty of undivided loyalty

Both disclosure forms include a section on “dual agent withdesignated sales associates”

Chapter 2 Part I Law of Agency


Buyer agency
Buyer Agency

Fiduciary

relationship with buyer

Compensation from

buyer/ seller or both

Buyer

client

Buyer as

customer

Chapter 2 Part I Law of Agency


The listing agreement
The Listing Agreement

Exclusive-right-to-sell

Exclusive agency

Open listing

Exclusive-right-to-rent

Exclusive-right-to represent

( buyer agency)

Chapter 2 Part I Law of Agency


The agency disclosure form
The Agency Disclosure Form

Sale or rental of 1-4 unit residential properties and condos and coops in any size building

Informs consumers of

their agency relationship and choices

Used at the first substantive contact

Advance informed consent

Chapter 2 Part I Law of Agency


Two separate agency disclosure forms required
Two Separate Agency Disclosure Forms Required

One for seller/buyer transactions

Another for landlord/tenant transactions

Chapter 2 Part I Law of Agency


Other types of disclosure
Other Types of Disclosure

  • Agency

  • Agricultural districts

  • Electrical service

  • Lead-based paint

  • Mold

  • Property condition

  • Radon

  • Stigmatized Property

  • UFFI

  • Utility surcharge

  • Uncapped gas wells

Chapter 2 Part I Law of Agency


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