Broker Kim's firm in Rapid City has a listing agreement with seller Paul. Buyer Nancy, who is also a client of Kim's firm, wants to purchase Paul's property. To avoid a full dual agency situation, Kim assigns salesperson Greg to represent Paul and salesperson Amy to represent Nancy, each acting independently. Which type of agency relationship does this arrangement create?
Correct Answer
D) Designated agency, because the broker assigns separate licensees to each party
Designated agency occurs in South Dakota when a broker assigns specific licensees within the same firm to represent the buyer and seller separately in the same transaction. Greg represents Paul and Amy represents Nancy, each owing full fiduciary duties to their respective clients. This arrangement is recognized under SDCL 36-21A as a way to manage potential conflicts when both parties are clients of the same brokerage.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
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