Laws of Agency: In-Depth Guide for New York
Laws of Agency is one of the most important and heavily tested exam topics, covering the fiduciary relationship between agents and their clients. The concept of agency is fundamental to understanding an agent's legal obligations and forms the basis for professional conduct in real estate.
The cornerstone of agency law is the six fiduciary duties, easily remembered by the acronym OLD CAR: Obedience (following lawful instructions), Loyalty (putting the client's interests first), Disclosure (revealing all material facts), Confidentiality (protecting private information), Accountability (accounting for all funds), and Reasonable Care (exercising competence and diligence). These duties apply to every client relationship.
Know how agency relationships are created: express agency (written or oral agreement), implied agency (through actions or conduct), and apparent agency (through third-party perception). Also understand how they terminate: completion, expiration, mutual agreement, death or incapacity, destruction of property, or breach. Dual agency — representing both buyer and seller — requires informed written consent from both parties and is prohibited in some states.
For New York-specific regulations, consult the New York exam prep guide and practice with our Laws of Agency practice questions.