Tom is a Colorado employing broker whose firm represents the seller of a home listed at $525,000. A buyer-client of the same firm submits an offer. Tom designates broker associate Sarah to represent the seller and broker associate Kevin to represent the buyer. Which Colorado-specific agency structure is Tom using?
Correct Answer
D) Designated brokerage
Colorado law under C.R.S. § 12-10-403 recognizes designated brokerage (also called designated agency), where an employing broker assigns different broker associates within the same firm to represent each party in a transaction. Each designated broker associate owes full fiduciary duties exclusively to their assigned client, avoiding the conflicts inherent in traditional dual agency. This is a Colorado-specific mechanism for handling in-house transactions.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
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