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.