SALES ASSOCIATE COURSE
CHAPTER 4
Authorized Relationships Duties and Disclosure
Livestream Students: WEBCAM POLICY
To receive credit for this course:
1. Camera must be ON
AND
2. Student must be VISIBLE to the
instructor for the ENTIRE time class is in
session
▪ No driving around during class,
running errands, sleeping on camera,
etc. We can see you!
▪ No Exceptions
Webcam Policy Reminder! ▪ Review students that do not need
course credits may attend without
having their camera on.
1. Common
Unwritten
Custom and court decisions
Compensatory and punitive
2. Statutory – criminal
courts
F.S. 455 - DBPR
F.S. 475 – FREC Three Categories of Law
Legislature (written)
Monetary and
imprisonment
3. Administrative
61J2 Florida Administrative
Code
Monetary
Agency Law
Principal – Agent relationship
1. Employer – principal
2. Relationship based on trust
3. Agent works on behalf of employer
Three Types of Agents
An agent is a person entrusted to represent another. The three types are:
Universal Agent General Agent Special Agent
Everything One Business One Transaction
1. Not a type of agency
2. Extension of another agency
3. Act on behalf of another
agent
4. Owes same duties to
principal as original agent
5. Sales/Broker Associates
I. General agents of broker
Subagent II. Subagent of brokers
principals
Purpose: Inform and educate Brokerage Relationship
the public
Disclosure Act
Defines relationship between
broker and brokers employer
1. Residential
2. Non-residential
3. Disclosure forms
Brokerage Relationships
Consumer Customer Principal
No Brokerage Transaction Broker Single Agency
(no representation) (limited representation) (full representation)
Honesty & Fairness Honesty & Fairness Honesty & Fairness
Account for All Funds Account for All Funds Account for All Funds
Disclose Known Facts Disclose Known Facts Disclose Known Facts
(Residential) (Residential) (Residential)
Present All Offers Present All Offers
Skill Care & Diligence Skill Care & Diligence
(Fiduciary Duties)
Limited Confidentiality
Confidentiality (Full)
As Agreed
Obedience
Loyalty
(verbal) Disclosure (Full)
(in writing) (presumed) (in writing)
8
Brokerage • Single Agency – Full
representation for buyer or seller
Relationships (not both)
• Dual Agency – Full
representation for buyer and
seller (illegal)
• Transaction Brokerage – Limited
representation for both buyer and
seller in the same transaction
(legal)
• No Brokerage Relationship – No
representation
• e.g. For-Sale-By-Owner
Residential sales – required
Residential Transaction disclosures
• Improved residential property
of 4 units or less
• Vacant (unimproved) land
zoned for 4 residential units or
less
• Agricultural property of 10 acres
or less
• Leases with option to purchase
with 4 or less units
• Business interests with 4
residential units or less
• Transaction Broker, Single
Agency and No Brokerage
Relationships
• Must be made
• Before entering into an
agreement
• Before showing
property
• Whichever occurs first
Disclosure Requirements
Disclosure Exemptions
• Non-residential
• Rental or leasing
• Bona fide “open house”
• Casual conversation
• Answering factual questions
• Auctions
• Appraisals
• Business opportunities/enterprises
Residential transactions
• Result –written contract
• Retain for 5 years
Retaining Disclosure • Whether:
Documents • Transaction closes
• Fails to close
• Licensees owe duty of
good faith and honesty to
customers
• A broker’s customers are
entitled to rely on any
material statement Honesty and Fairness
related to a real estate
transaction made by a
licensee
• Required in all types of
relationships
Disclose Known Facts
• Licensee must disclose to buyers all
known facts that materially affect the value
of RESIDENTIAL property
• Required in all types of relationships
• The broker must account for all
funds entrusted to him or her
with regard to a real estate
transaction
• Money entrusted to a broker
must be kept separate from the
broker’s funds
• Required in all types of
relationships
Account for All Funds
Skill Care and Diligence
• Broker must
• Keep informed on changes and developments
that may affect the value of the property
• Use diligence in facilitating the transaction
• Single agency or transaction brokerage
Licensee must present all
offers and counter offers in a
timely manner
• Unless directed by a party
to the contract (buyer or
seller) in writing
• Including written and oral
offers
Present all Offers
Single agency or transaction
brokerage
Duty to transmit all offers
• Verbal
• Written
• No binder deposit
• Exception: employer
instructs not to
Presenting Offers • Brokers do not
accept/reject offers
• Exception: power of
attorney
• Transaction Brokerage
• Unless waived in writing
• Three areas are
confidential
• Price other than
current offer
Limited Confidentiality • Terms other than
current offer
• Motivation
• Transaction brokerage only
• Single Agency
• A broker may not
reveal to a third party,
without the principal’s
permission, Full Confidentiality
information that may
lessen the principal’s
bargaining position
• Single agency only
Obedience
• A broker is obligated to follow
all legal instructions of the
principal
• Advise the principal and
then obey or withdraw from
the relationship
• A broker may not follow an
illegal instruction
• Single agency only
Loyalty
• A broker may not adopt an attitude
adverse to the principal’s interest
• A broker must work for the best
price and terms for the principal
• Single agency only
• A broker must keep the
principal informed of any
information that might affect
the transaction or the value of
the property Full Disclosure
• Single agency only
• Mutual Trust and
Confidence
• Between a broker
(agent) and sellers or
buyers (principals or
clients) Fiduciary Relationship
• When accepted as a
part of single agency
• The opposite of dealing at
Arm’s Length (Caveat
Emptor)
• Single Agency (Full)
representation
• Represent one party as
single agent
• Cannot represent the other
party as a single agent or
Dual Agency transaction broker
• Could represent the other
party in a no brokerage
relationship
• Dual Agency is illegal in Florida
• Change from single agent to
transaction broker
• Requires written consent
• Prior to transition
• Signed by the principal(s)
• Signatures
• Recommended for all
disclosures
Consent to Transition to
• Required for Transition to
Transaction Broker Transaction Broker
Designated Sales Associate
Key: Broker Advises ABC
Licensees (Not: Real Estate
Buyers & Sellers) Company
Represents 1. Non-residential
2. Requested by both parties
Same
Transaction 3. $1 Million or more in assets
Buyer Broker assigned Seller Broker assigned
Sales Associate Sales Associate
(Single Agent) (Single Agent)
• Adversaries
• Opposite of fiduciary
relationship
• “Caveat emptor” (buyer
beware)
• Buyer and seller acting in
their own best interest
Arm’s Length
Relationships
Terminated by:
• Fulfillment of agency
purpose
• Mutual agreement
• Expiration of term
Terminating Brokerage
• Agent renunciation by
Relationship giving notice to principal
• Revocation by principal
• Death
• Destruction of the
property
• Bankruptcy
Policy and
Procedures
Manual
• Provides guidance
• Not required
• Release broker from
liability
• Creates harmony
• Brokerage relationships
• Document retention
• Do not Call laws, etc.
Coffee Break
15 Minutes
