Chapter 1 - Brokerage Relationships

Power of attorney

Attorney in fact

Power of attorney (the paper) - Document authorizing one to act for another

Attorney in fact - Person with power of attorney

professional services

advice, opinions, and guidance

Single agency

Dual agency

Designated agency

Single agency - one client (represent buyer or seller)

Dual agency - two clients (represent both buyer/seller - must get permission from both in writing)

Designated agency - two clients and two sub-agents (still dual agency w/ different sub-agents)

Proxy

Agent authorized to act for client

Agency is built around…

Trust and confidence

Legal agency relationships in SC

• Seller agency

• Buyer agency

• Disclosed dual agency

• Disclosed designated agency

• Transactional brokerage

Joint liability

Several liability

vicarious liability

Joint liability: agent and subagent liable 

Several liability: agent and subagent only liable for their own actions (one)

vicarious liability: anything the sub-agent knows, it is presumed the agent also knows

Universal agents

General agents

Special agent

Universal agents: has very broad authority when acting for the principle

General agents: is the agent of an agent, such as a sub-agent represents a client on behalf of another agent 

Special agent: is the agent, such as the broker-in-charge

Disclosed principal

Undisclosed principal

Partially dislocated principle

Disclosed principal - can tell the other part who the principle is and that you represent them

Undisclosed principal - cannot tell who the principle is or that you represent them

Partially dislocated principle - cannot tell who the principle is but can say that you represent them

obligations/ fiduciary duties

Agent:

• Obedience

• Full disclosure

• Loyalty

• Care and diligence

• Accounting (5 years)

• Confidentiality

Client:

• Good conduct

• Reimbursement (Only if client takes the house off the market)

• Indemnity (If the client goes out on their own and gets themselves in trouble, they cannot blame the agent)

• Opportunity

• Compensation (Procuring cause of the sale)

• Good faith

Obligations to customer

• Agent: 

  • Honesty

  • Fairness

  • Care and skill

  • Disclose 

• Customer:

Dual agency fiduciary duties

• Limited duties

  • Obedience

  • loyalty 

  • Disclosure

• Duties in full

  • Confidentiality

  • Accounting (5 years)

  • Reasonable care

Agent obligations to third parties (customers)

• Services agents may provide:

  • Show property for sale or lease

  • Provide statistics and information on property

  • Provide pre-printed forms and contracts

  • Act as a scribe when preparing forms and contracts

  • Identify settlement services providers

  • Identify schools, shopping, facilities, etc.

• Services agents must:

  • Timely present all offers

  • Timely account for all monies

  • Provide pre-printed forms and contracts

  • Provide explanation of service provided

  • Be fair and honest and provide accurate information

Agency disclosure requirements do not apply

• When transaction is regarding the renal of residential or commercial property

• When communication from the licensee is a solicitation of business

• Transaction is regarding the sale of property by auction

Express authority

Implied authority

Express authority - Authority granted in the agency agreement for the agent to act on behalf of the client 

Implied authority - Supplemental authority that comes with express authority

Open listing (seller)

• Seller can hire as many agents as they desire

• Seller only has to pay a commission to the one agent that actually sells the property

• Seller reserves the right to sell the house on their own and pay no commission

Exclusive agency listing (seller)

• Seller can only hire one agent to sell the property

• Seller only has to pay a commission if an agent sells the property

• Seller reserves the right to sell the property on their brown and pay no commission

Exclusive right to sell listing (seller)

• Seller can only hire one agent to sell their property

• Seller has to pay a commission to the listing agent regardless of who sells the property

Net listing (seller)

• Seller establishes a net amount they must get at closing

• Agent gets any amount they can sell the property for, over the net amount to the seller, as a commission

• Net listings are illegal in SC

Open buyer representation agreement (buyer)

• Buyer can hire as many agents as they choose

• Buyer only has to pay the one agent that finds the property they purchase

• Buyer reserve the right to find the property on their own and pay no commission

Exclusive agency, buyer representation agreement (buyer)

• Buyer can only hire one agent

• Buyer only had to pay the agent if the argent finds the property they purchase

• Buyer reserves the right to find the property on their own and pay no commission

Exclusive right to purchase buyer agreement (buyer)

• Buyer can only hire one agent

• Buyer has to pay agent if they buy a property

• Termination of agency

  • By operation at law

  • By acts of the parties

• By operation at law

  • Lapse of time

  • Loss if capacity

  • Destruction of subject matter

  • Loss of title 

  • Performance

  • Bankruptcy

• By acts of the parties 

  • Mutual agreement 

  • Revocation 

  • abandonment/ renunciation

Two fiduciary duties that never expire

Accounting (5 years) and Confidentiality

(All other fiduciary duties expire when agent is terminated)

W-2 V.S. 1099

• Employees receive a W-2

• Independent contractors receive a 1099