Unit 3: Key Points

These are the most important points for you to remember in this unit.

Florida Brokerage Relationship Disclosure Act

  • The Florida Brokerage Relationship Disclosure Act prohibits the practice of dual agency.
  • An agent is a person who is authorized by a person (known as a principal) to handle business matters on behalf of the principal.
  • An agent has fiduciary duties.
  • Florida law presumes that a broker is acting as a transaction broker.
  • The three authorized brokerage relationships under Florida law are
    • transaction broker,
    • single agent,
    • designated sales associate, and
    • one status called no brokerage relationship.

Disclosure of Brokerage Relationships

  • Disclosure of brokerage relationships are required for “residential sales,” defined as
    • improved residential property of four units or fewer,
    • unimproved residential property intended for use of four units or fewer, or
    • agricultural property of 10 acres or fewer.
  • Disclosure of brokerage relationships are NOT required for
    • nonresidential transactions,
    • the rental or leasing of real property, unless an option to purchase all or a portion of the property improved with four or fewer residential units is given, auctions, appraisals, sale of business enterprises or business opportunities, or transaction brokers.

No Brokerage Relationship

  • A licensee who has no brokerage relationship must give the person a no brokerage relationship notice before showing a property or entering in to an agreement for representation.
  • A licensee with no brokerage relationship has the duty of
    • dealing honestly and fairly,
    • disclosing all known facts that materially affect the value of residential property which are not readily observable to the buyer, and
    • accounting for all funds entrusted to the licensee.

Single Agent

  • A single agent is a broker who represents, as a fiduciary, either the buyer or seller but not both in the same transaction.
  • The principal is the person entering into a real estate relationship with a single agent. 
  • Only a single agent can call the customer a principal.
  • A single agent owes nine specific duties to the principal
    • dealing honestly and fairly,
    • loyalty,
    • confidentiality,
    • obedience,
    • full disclosure,
    • accounting for all funds,
    • skill, care and diligence in the transaction,
    • presenting all offers and counteroffers in a timely manner, and
    • disclosing all known facts that materially affect the value of residential real property that are not readily observable.
  • The single agent must give the single agent notice before, or at the time of, entering into a listing agreement or an agreement for representation or before showing the property, whichever occurs first.
  • If a brokerage firm lists property for a seller, acting as the seller’s single agent, all members of the brokerage firm are also single agents of the seller.

Transaction Broker

  • Duties of a transaction broker include
  • dealing honestly and fairly,
  • accounting for all funds,
  • using skill, care, and diligence in the transaction,
  • disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer,
  • presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing, and
  • limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure
    • that the seller will accept a price less than the asking or listed price,
    • that the buyer will pay a price greater than the price submitted in a written offer,
    • of the motivation of any party for selling or buying property,
    • that a seller or buyer will agree to financing terms other than those offered, or
    • any other information requested by a party to remain confidential, and
    • any additional duties that are mutually agreed to with a party,
  • a single agent can change to be a transaction broker at any time during the relationship by having each party sign a Consent to Transition to Transaction Broker Notice.

Designated Sales Associate

  • A broker in a nonresidential transaction, when requested by the parties, may appoint one licensee in the firm to act as a single agent for the buyer, and one licensee in the firm to act as a single agent for the seller as designated sales associates.
  • The legal requirements for designated sales associate status are that
    • the transaction be for non-residential property,
    • buyer and seller sign a statement the he or she has assets in excess of $1 million,
    • buyer and seller request this representation status, and
    • the licensees give the parties a designated sales associate notice and a single agent notice.

Retention of Brokerage Relationship Disclosures

  • Brokerage relationship disclosures must be retained by the broker for five years in all transactions that result in a written contract to purchase and sell real property.