Topic 4.3: Authorized Brokerage Relationships

Learning Objectives

After successfully completing this topic, you will be able to

• state the type of brokerage relationship that is illegal in Florida,
• state the three basic duties all licensees have to their customers, and
• list the three authorized brokerage relationships under Florida law.

Brokerage Relationships

Florida law presumes that a broker is acting as a transaction broker, but the broker can operate as a single agent or as a nonrepresentative in a transaction, provided that written disclosures are given to the parties. A broker may not act as a dual agent.

The broker decides the type of relationship the company will have with a customer, but the customer is not required to enter a brokerage relationship. Licensees who work in the firm must observe all the duties of that relationship. For example, if a sales associate in the firm is a single agent for a seller, another sales associate in the same firm cannot be a single agent for the buyer, because that would be an illegal dual agency.

All licensees, regardless of their brokerage relationships, have three basic duties to customers:

• fair and honest dealing,
• disclosure of known facts that materially affect the value of residential property and that are not readily observable to the buyer, and
• accounting for all funds.

A broker can work with a buyer and a seller with no broker relationship. This is called nonrepresentation.

If a broker wants to establish a brokerage relationship, the three relationships authorized by Florida law are

• single agent,
• transaction broker, and
• designated sales associate.