At an open house, a listing agent engages in extended conversation with a prospective buyer, discussing the buyer's needs and financial situation in a way that leads the buyer to reasonably believe the agent is representing them. No written agreement exists. Under California law, what type of agency relationship may have been created?
Correct Answer
B) Ostensible agency, arising from conduct that causes a third party to reasonably believe a representation exists
Under California Civil Code §2300, ostensible agency exists when a principal causes a third party to reasonably believe another person is acting as their agent. In a listing context, the broker's conduct — through the actions of the listing agent — can create an ostensible agency with the buyer if that conduct reasonably leads the buyer to believe they are being represented. This exposes the agent and broker to fiduciary-like obligations and potential liability even without a written agreement.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
More Laws Of Agency Fiduciary Duties Questions
A property sold for $450,000. The commission rate was 6%. If the listing broker received 60% of the total commission, how much did the listing broker receive?
An individual who is not employed by the client, but has been delegated agency duties by an agent of the client, is referred to as a(n):
What are the three steps of the agency disclosure in proper chronological order?
An agent needs to disclose a conflict of interest to the affected parties when a principal or service provider in the transaction is the agent’s:
A broker who simultaneously represents the best interests of both opposing parties in a transaction is known as a(n):
- → When showing a listed residential property of one to four dwelling units to potential buyers, the listing broker is required to disclose:
- → Broker fees deposited with the broker before they are earned are called:
- → A real estate broker is subject to disciplinary action from the Department of Real Estate (DRE) if they:
- → The seller states they will accept the buyer’s offer if the broker lowers their 6% commission by 25%. If the broker accepts, they will receive:
- → When a broker wants to store documents electronically, the storage method may not allow the final documents to be altered. What method of electronic document storage is required by the Department of Real Estate (DRE)?
- → A broker receives a full price offer on a house they are listing. Before they present the offer to the seller, another broker brings in an all cash offer for $5,000 less. The listing broker is to:
- → A seller’s broker needs to disclose:
- → Broker Chuck listed a duplex for sale from a corporate owner. After entering into the listing, the officers of the corporation die in a plane crash. What happens to the listing?
- → If a 16-year-old emancipated minor wishes to sell real property, their broker may:
- → A broker who fails to promptly disclose their dual agency status is subject to:
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Previous Question
A real estate broker enters into a listing agreement with a seller and assigns a salesperson to handle the listing. Under California law, who holds the agency relationship with the seller?
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Under California law, what is the legal term for an agent who represents both the buyer and the seller in the same real estate transaction?