Unit 4 Flashcards
Agency
means a relationship in which a real estate broker or licensee, whether directly or through an affiliated licensee, represents a consumer by the consumer’s consent, whether express or implied, in a real property transaction.
General Agency
The relationship of a broker, managing broker, or leasing agent with a sponsoring broker.
Agent
the individual who is authorized and consents to represent the interests of another person. In the real estate business, a firm’s sponsoring broker is the agent and shares this responsibility with the licensees who work for him.
Brokerage Agreement
an agreement, written or oral, between a sponsoring broker and a consumer for licensed activities to be provided to a consumer in return for compensation or the right to receive compensation from another. In Illinois, any exclusive brokerage agreement must be in writing.
Latent Defect
A structural defect that would not normally be uncovered over the course of an ordinary inspection (due to the placement or type of defect, for example)
Stigmatized properties
properties that society has branded undesirable because of events that occurred there.
Article 15 of the Real Estate License Act of 2000 states that
“no cause of action shall arise against a licensee for the failure to disclose a fact situation on property that is not the subject of the transaction” and
“no cause of action shall arise against a licensee for the failure to disclose physical conditions, located on property that is not the subject of the transaction, that do not have a substantial adverse effect on the value of the real estate that is the subject of the transaction.”
Article 15 further states that, in dealing with specific situations related to disclosure, “no cause of action shall arise against a licensee for the failure to disclose that an occupant of that property was afflicted with HIV or any other medical condition or that the property was the site of an act or occurrence which had no effect on the physical condition of the property or its environment or the structures located thereon.”
Any action brought under Article 15 must commence within two years after the person bringing the action knew or should have known of such act or omission. In no event can the action be brought more than five years after the date on which the act or omission occurred.
Express Agency
The principal and agent may enter into an express contract (also called an express agreement) in which the parties formally express their intention to establish an agency relationship and state its terms and conditions. The agreement may be either oral or written. An agency relationship between a seller and a sponsoring broker is generally created by a written employment contract, commonly called a listing agreement, which authorizes the sponsoring broker (or designated licensees) to find a buyer or a tenant for the owner’s property. An express agency relationship between a buyer and a sponsoring broker is created by a buyer agency agreement. Similar to a listing agreement, it stipulates the activities and responsibilities the buyer expects from the sponsoring broker (or designated licensees) in finding the appropriate property for purchase or rent
Implied Contract
This occurs when the actions of the licensee indicate that the licensee has formed an agency relationship with a party. Even though the licensee may not have consciously planned to create an agency relationship, the parties can create one unintentionally, inadvertently, or accidentally by their actions.
Universal Agent
A universal agent is a person empowered to do anything the principal could do personally. The universal agent’s authority to act on behalf of the principal is virtually unlimited.
General Agent
A general agent may represent the principal in a broad range of matters related to a particular business or activity. The general agent may, for example, bind the principal to any contract within the scope of the agent’s authority. A property manager is typically considered a general agent to the property owner. Brokers and managing brokers are general agents to their sponsoring broker.
Special Agent
A special agent is authorized to represent the principal in one specific act or business transaction only, under detailed instructions. A real estate licensee usually is a “special” agent to a client. If hired by a seller, the licensee is limited to finding a ready, willing, and able buyer for the property. A special agent for a buyer (buyer’s agent) has the limited responsibility of finding a property that fits the buyer’s criteria.
As a special agent, the licensee may not bind the principal to a contract. The principal makes all contractually related decisions and will sign on her own. A special power of attorney is another legal means of authorizing an agent to carry out only a specified act or acts.
Designated Agent
a designated agent is a person authorized by the sponsoring broker to act as the agent of a specific principal. A designated agent is the only licensee in the company who has a fiduciary responsibility toward that principal. When one licensee in the company is a designated agent, the others are free to act as agents for the other party in a transaction. In this way, two licensees from the same real estate company may represent opposite sides in a property sale without entering dual agency.
Single Agency
When an agent or firm represents only one party (buyer, seller, landlord, or tenant) exclusively in a real estate transaction, this relationship is called single agency. The agent and firm’s fiduciary and statutory duties are provided only to that one party (the principal).
