Part 2 of 7

From Section II. WHAT IS AN AGENT?: “An agency relationship is defined under the common law as follows:” (1) Agency is the fiduciary relationship which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act. (2) The one for whom action is taken is the principal. (3) The one who is to act is the agent.”

From Section III. HOW ARE AGENCY RELATIONSHIPS CREATED?: “Agency relationships are created when the principal (the buyer or seller) delegates authority to the agent to perform acts on behalf of the principal and the agent consents to the delegation. An agency relationship does not require a writing, a contract, nor compensation paid by the principal to the agent. An agency can also be created by the conduct of the parties toward each other regardless of what label the parties use, or do not use, to describe their relationship. Thus, agency relationships can result unintentionally, accidentally, or inadvertently.”

From Section IV. DUTIES OWED BY AN AGENT TO HIS PRINCIPAL: “A real estate broker who becomes an agent of a seller or buyer, either intentionally through the execution of a written agreement, or unintentionally by a course of conduct, will be deemed to be a fiduciary. Fiduciary duties are the highest duties known to the law. Classic examples of fiduciaries are trustees, executors, and guardians. As a fiduciary, a real estate broker will be held under the law to owe certain specific duties to his principal, in addition to any duties or obligations set forth in a listing agreement or other contract of employment (such as a buyer agency agreement).”

(Continue To Part 3 of 7)