Salesperson Greg works for Broker Helen in Whitefish, Montana. Without Helen's knowledge, Greg enters into a buyer representation agreement with buyer Stan and shows Stan a property listed by a different brokerage. Helen later discovers the agreement. Under Montana law, which of the following is most accurate regarding the agency relationship created?
Correct Answer
D) Greg has created a valid agency relationship with Stan that binds Helen's brokerage, because a salesperson's acts bind the employing broker.
Under Montana law (MCA Title 37, Chapter 51), a licensed salesperson may only perform real estate activities on behalf of and under the supervision of their employing broker. Critically, the acts of a salesperson within the scope of licensed activity legally bind the employing broker and brokerage. Even though Greg acted without Helen's prior knowledge or approval, the buyer representation agreement Greg entered into with Stan is a licensed real estate activity that binds Helen's brokerage. Helen may face disciplinary liability for failing to supervise Greg, but the agency relationship with Stan is valid and binding on the brokerage.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A relationship where a listing broker authorizes other brokers to act as agents of the seller, extending the seller's agency relationship to cooperating brokers.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
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