A broker is adjudicated incompetent by a court while a listing agreement is still in effect. What is the most likely consequence for the agency relationship?
Correct Answer
B) The agency terminates by operation of law due to the agent's incapacity
When the agent loses legal capacity, the agency generally terminates by operation of law because a legally incompetent person cannot fulfill fiduciary duties.
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Related Topics & Key Terms
Key Terms:
Related Concepts
In real estate, a client is someone to whom the agent owes fiduciary duties through an agency relationship, while a customer is a third party to whom the agent owes only honesty and fair dealing.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
More General Principles Of Agency Questions
A listing agreement creates an agency relationship between:
A property manager screens a rental applicant using objective criteria including income, credit score, and rental history. The applicant is denied because his income is below the minimum threshold. Has the property manager violated fair housing laws?
In a real estate team structure, what is the role of the team leader?
A property management agreement between an owner and a property manager typically specifies which of the following?
What is 'designated agency' in the context of a real estate brokerage?
- → A real estate team receives a referral from a past client. The team leader assigns the referral to a team member. The team member shows the buyer several properties. Who is the buyer's agent?
- → A property manager receives a maintenance request from a tenant who reports a broken heater during winter. The property manager delays the repair for three weeks, and the tenant suffers property damage from frozen pipes. Who may be liable for the damages?
- → A real estate team consists of a team leader (licensed broker) and three licensed sales agents. A buyer contacts one of the team agents about a listing held by another team agent. What agency concern arises in this situation?
- → A property management company manages several apartment complexes. All of the following are typical duties of a property manager EXCEPT.
- → A real estate team is advertising its services. All of the following are generally required when a team advertises EXCEPT.
- → A commercial broker represents a landlord in leasing office space. During negotiations, the tenant discloses to the broker that she would pay up to $35 per square foot, even though the listed rate is $30. What must the broker do with this information?
- → A commercial property owner hires a broker to find a tenant for a 50,000 square-foot warehouse. The broker locates a suitable tenant and negotiates a 10-year lease. The owner pays the broker a commission based on the total lease value. What type of agency did the broker hold?
- → A commercial tenant is negotiating a five-year lease for retail space. The tenant hires a tenant representative broker to negotiate lease terms on the tenant's behalf. What agency relationship exists between the tenant and the tenant representative?
- → A commercial property manager is responsible for operating a shopping center. The manager must prepare an annual operating budget, negotiate vendor contracts, and handle tenant relations. In addition to management fees, the owner authorizes the manager to earn a leasing commission for each new tenant the manager brings in. Is this compensation structure permissible?
- → A property owner hires a licensed property manager to handle tenant screening, rent collection, and maintenance for a 20-unit apartment building. What type of agency relationship exists between the owner and the property manager?
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Previous Question
An agent without any prior authority negotiates a reduced-price deal on behalf of the property owner. The owner, after learning the full details, decides to accept the deal. What legal concept allows the owner to validate the agent's unauthorized act?
Next Question
A property owner allows a neighbor to show the property to friends and even negotiate on the owner's behalf over several months, but no written or oral agreement was ever made. A court later finds an agency existed. How was this agency most likely created?