2. A: Definitions and Types of Agenyc

Question 1

One who is authorized to act on behalf of another and bind that party by the agent’s decisions and actions.

Answer 1

An agent

Question 2

One who grants the authority for another to act on the principal’s behalf.

Answer 2

The principal

Question 3

An agent of an agent.

Answer 3

Subagent

Question 4

One who is not in an agency relationship with the licensee

Answer 4

A customer

Question 5

One who is in an agency relationship, generally a principal, with a licensee.

Answer 5

A client

Question 6

One who is any person who has been granted a power of attorney on behalf of someone else as that person’s agent.

Answer 6

An attorney-in-fact

Question 7

A stand-in for another and has limited, generally very temporary authority; this term can be loosely used to mean agent.

Answer 7

A proxy

Question 8

A type of agency which grants the agent the authority to represent the principal who has been granted an unilimited power-of-attorney for another in both personal and business matters.

Answer 8

Universal (type of agency)

Question 9

A type of agency that grants the agent broad authority to act continuously on behalf of the principal in all authorised business maters, such as a licensee associated with a broker/agent or a property manager acting on behalf of a landlord.

Answer 9

General (type of agency)

Question 10

A type of agency where the agent’s authority to represent the principal is more restricted than general agency, and typically is limited to a particular transaction, such as a listing.

Answer 10

Special (type of agency)

Question 11

A type of agency relationship where the agent is representing only one party.

Answer 11

Single agency

Question 12

A type of agency relationship where the agent represents both parties.

Answer 12

Dual agent

Question 13

A type of agency relationship where anyone who is authorised to act as an agent for the agent of a principal.

Answer 13

Subagency

Question 14

A fiduciary duty that means to work steadfastly for, never against, the best interests of the principal while applying expected, reasonable care, skill and diligence in the performance of all transaction related matters.

Answer 14

Loyalty, allegiance

Question 15

A fiduciary duty to adhere to the principal’s instructions (does NOT apply to illegal activity)

Answer 15

Obedience

Question 16

A fiduciary duty to give a fair and accurate accounting of all funds that are transaction-related, even if that means after the transaction is over and the agency relationship has been terminated.

Answer 16

Accounting

Question 17

A fiduciary duty to disclose all pertinent information to the principal.

Answer 17

Disclosure

Question 18

A fiduciary duty to keep confidential all information that might weaken the principal’s interests such as lowest acceptable price or unusual/extenuating circumstances.

May be revealed with permission. Does not apply to illegal activity. Outlives the termination of the agency relationship.

Answer 18

Confidence

Question 19

Any general exaggeration found in promotional materials or agent comments intended to create a stronger impression of a property.

Answer 19

Puffing, puffery

Question 20

A variety of misleading statements or undisclosed facts that an agent reasonably should have known and disclosed.

Answer 20

Misrepresentation

Question 21

Making a careless statement where the exercise of due diligence and professional standards of care would have made the correct facts known.

Answer 21

Negligent Misrepresentation

Question 22

Making a false-statement - or failing to make a known, material disclosure - that is likely to induce a reasonable person to act against their own best interest.

Answer 22

Material misrepresentation

Question 23

Intentional misrepresentation designed to persuade a party to make a decision the party would not have had full and accurate disclosure been made.

Answer 23

Fraud

Question 24

Any property condition that is significant in a party’s decision-making process of approving or disapproving a purchase.

Answer 24

Material facts

Question 25

Material defects that include:

- structural and physical conditions (leaky roof, cracked foundation)

Answer 25

Structural physical conditions

Question 26

Material defects that include:

• wood infestation
• lead-based paint
• asbestos
• drinking water problems
• radon gas
• urea formaldehyde
• toxic mold

Answer 26

Structural property environmental problems (internal)

Question 27

Material defects that include:

• contaminated soil/groundwater
• underground storage tank problems
• existing or proposed problems in the area

Answer 27

Property environmental problems (external)

Question 28

A type of legal liability which refers to a superior or principal’s responsibility for the subordinate agent.

Answer 28

Vicarious

Question 29

A type of legal liability which means shared between two or more parties.

Answer 29

Joint

Question 30

A type of legal liability which means liability of one party that can legally be pursued separately from other liable parties.

Answer 30

Several