Class 1 Level 4: Real Estate Brokerage and Law of Agency

Class 1 => Level 4: Real Estate Brokerage and Law of Agency

Flashcards R in OLD CAR Stands for?- Reasonable Care In talking with a party or another agent, a license holder should not call themselves an __ until they are actually representing a client. Although the word agent has become synonymous with license holder, the distinction is critical.agentYou can be a license holder whether or not you represent anyone. To be an agent, you must have an agency relationship with a client.n order for a brokerage to be able to represent both the buyer and seller in a real estate transaction, the brokerage needs to have the permission of ____ .

BOTH PARTIES

The first letter of OLD CAR represents the duty of ____ .obedience `What exactly is a "subagent"?A subagent is a license holder who represents a principal (i.e. client) through cooperation with the principal's (i.e.client) broker.

Agency can be created:OrallyIn writingBy implication or action

DTPA defines an ____ as one that "takes advantage of the lack of knowledge, ability, experience, or capacity of a person to a grossly unfair degree." unconscionable action There are three different classifications of agency

relationships:

Special Agency (broker-client)General Agency (sales agent-broker)Universal Agency (rarely used in real estate) The classic example of a general agency relationship in real estate can be found in the relationship between a ___ and a ___ broker (principal)sponsored licensee (agent) The is a law that was passed in 1890 that prohibits trusts, contracts, combinations, or conspiracies "in the restraint of trade or commerce." Essentially, it made monopolies a no-no in the United States. It's a federal law, and lots of important state laws are based around it.Sherman Antitrust Act Oral disclosure is acceptable at initial contact, but ____ is required once substantive dialogue occurs.written disclosure In ____ , which is the unintentional spread of false information, the only proof that has to be presented to the court is that the defendant did something that was misleading or incorrect, and that the plaintiff was harmed by the action of the defendant.misrepresentation A in OLD CAR Stands for?- Accountability And because the agency relationship is created at the broker level, this means that not only does the broker owe the client (principal) fiduciary duties, ___ owe that client fiduciary duties as well.but ALL of that broker's sponsored agents A way to help you remember the fiduciary duties is the

acronym OLD CAR:

Obedience (if legal)Loyalty (100%)Disclosure (full)Confidentiality (forever)Accounting

(forever)Reasonable care

Warranty of AuthorityA representation by an agent to third persons that the agent has and is acting within the scope of authority conferred by his or her principal.The person who does the representing is the __, and the person who is being represented is the __ agentclient License holders must disclose their ___ at the first meeting with a party. Representation disclosure can happen orally or in writing. (When it involves a substantive dialogue with a party regarding a specific real property, the notice needs to be in writing in order to fulfill statutory requirements.) agency relationshipsSection 1101.558 of the Texas Real Estate License Act (TRELA) provides a complete description of how representation disclosure is to be handled, including identifying when the written notice is required.There are certain disclosure requirements that license holders need to be aware of, and they can be broken down

into two categories:

Disclosures required of the partiesDisclosures required of the license holders Agents must also disclose their agency relationships to ___. For example, a license holder might contact a listing agent for more information on a listing. The caller has to disclose whether they are working as a buyer's agent other agentsThis lets the other agent know where the caller's agency loyalty lies.Agency can be described in terms of:The manner in which it is createdThe degree of authority and liability it bringsThe form that it takes In a special agency relationship, the client grants their ___ the authority to act on their behalf for specific actions.agent

Agent: The __ is the agent of the __.sales agentbroker

For all subsequent renewals, the education requirement is ____ hours of continuing education. ____ of those hours must be Legal Update I and another ____ hours of Legal Update II. The rest of the hours can be any continuing education course.18Fourfour the 6 fiduciary duties throughout this course is with the

acronym OLD CAR:

ObedienceLoyaltyDisclosureConfidentialityAccountingReas onable Care There __ a TREC Rule that prevents the agent from being the person with a power of attorney for a client.is notSome lenders, however, will not accept anyone signing under a power of attorney at a closing. So, while there is no law or rule preventing the agent from having a power of attorney for the client, there is possible liability.The agency relationship in real estate is a ____ relationship.fiduciary Agency is created on the ___ level, not the __ level.brokersales agent ____ frees up the two appointed agents to give a full degree of representation to both clients.Intermediary with appointments All license periods are for ____ years.two A __ is an individual who has signed an agency agreement with you or your broker to represent them in a real estate transaction.client Recovery under the DTPA is limited to ____ damages, but if a license holder's violation of the DPTA is also a violation of Texas License Law, TREC can suspend or revoke the

individual's license.economic A __ is ANY person involved in a real estate transaction with you who is not your client.third party