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Flashcards in Brokerage Relationships Deck (13):
1

Ethics

managed by local realtor board

2

Employing broker reqs

1. active license for 2 yrs
2. passed brokerage administration course
3. pass state test again

3

Referral prohibitions

-state laws say that real estate licensee cannot take a referral without disclosing to client
-federal law says that no one can take a referral for any kind of federal loan
-if you are a mortgage and real estate broker then you can get a fee unless its a federal loan

4

Creating agency relationship

1. performance of act doesn't create agency - must be done in writing
2. must involve consent, control, expectation

5

Authority of Agent

1. actual authority
- express: comes from word or writing
- implied: reasonably needed
2. Apparent authority
-words or conduct cause third parties to believe that the agent has authority

6

duties and liabilities of agency

1. principal to agent
-perform agency contract
-compensation
-reimburse for expenses
-indemnify for loss suffered because of agency

2. agent to principal
-perform agency contract
-loyalty to principal
-reasonable skill in performing agency
- account for all money received
-cannot sign for client
without power of attorney

3. agent and third party
-only principal and third party are liable on a contract created in the proper course of agency
-always make sure 3rd party knows youre an agent

4. principal and third party
-both bound by the contract made through their agents

7

Vicarious liability

principal is liable for an agents actions, if they know of or authorized the agent to commit a wrongful act or not

8

Termination of Agency

1. acts of parties
-mutual consent
-terms of agency contract
-revocation by principal or agent

2. operation of law
-death, insanity, bankruptcy, change of law, fire, etc

9

Death in contract

-if principal dies, contract ends
--if agent dies, brokerage assigns a new agent
-in a purchase contract btwn buyer and seller, the agreement is still valid bc its not a personal services agreement and there's no agency

10

Colorado Brokerage Relationship Act

-removed assumption that all brokers work for seller
-created and defined buyer agency
-relieves principals of vicarious liability for acts of a transaction broker
-providers standards for the RE commission and legal actions
-set expectations for "in house deal"
-offers clients choices as to representation
-required disclosure of duties, obligations, and relationship options
-requires agency be voluntary
- sets forth duties owed to principals

11

in house deal

when buyer and seller are represented by agents from same company

12

designated broker

-broker in company who has been designated to work as an agent
-may work as a single agent for one party and treat the other party as a customer
-can never act as an agent for both parties

13

Power of Attorney

-an authorization to act on something in a legal or business matter
-can never sign on behalf of a principal without power of attorney