NY Real Estate Chapter 2
Types of Agency - ✔✔General Agent, Special Agent, and Universal Agent
General Agent - ✔✔Someone authorized to transact every kind of business for the
principal. Example: Property Manager
Special Agent - ✔✔An agent with limited authority to act on behalf of the principal,
such as created by a listing.
Example: Real Estate Agent / Real Estate Broker
Universal Agent - ✔✔A universal agent has complete authority over any activity of the
principal.
Example: Power of Attorney
Agent / Client Relationships - ✔✔The buyer and/or seller is known as the Principal or
Client.
The broker is known as the Agent.
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The salesperson is a Sub-agent of their broker.
Buyer Agency / Buyer Brokerage - ✔✔Buyer agency occurs when a purchaser/renter
hires a broker to represent them.
The purchaser/renter employs a broker to locate a property.
In this relationship, the buyer is the principal and the broker is the agent.
A Buyer Representation Form should be signed between the buyer and broker.
Fiduciary Duties - ✔✔The real estate agent serves as a fiduciary to the client.
A fiduciary relationship implies great confidence and trust.
As a fiduciary, the agent is in a position of great trust by the client.
Use the acronym OLD CAR to remember the agent's fiduciary duties to their client.
OLD CAR - ✔✔Obedience - Agent shall follow the legal instructions of their client.
Loyalty - Agent shall work in the best interests of their client.
, Disclosure of Information (Full Disclosure) - Agent shall promptly communicate all
information about the transaction to their client. This includes presenting all offers to
the client.
Confidentiality - Agent shall not reveal confidential information about the client to
prospective buyers, without the express consent from the client. Such confidential
information may harm the client.
Accountability - (refers to financial accountability) the agent must account for and
promptly remit all money or property entrusted to the agent.
Reasonable Care and Duty to Account - Agent shall possess the necessary skills and
training to perform their requested services.
Agency Disclosure Form - ✔✔A written explanation, to be signed by a prospective
buyer or seller of real estate, explaining to the client the role that the broker plays in the
transaction.
This Agency Disclosure Form is known as the 'New York State Disclosure Form for
Buyer and Seller'.
The Agency Disclosure Form outlines the following:
- The agent's duties to the client.
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- Explains that an agent owes a fiduciary duty to the client.
- Allows for advance consent to dual agency.
Dual Agency - ✔✔When a broker represents both the buyer and seller in a
transaction.
Dual agency is permitted in New York State; however, advanced informed consent by
BOTH parties is required.
Dual agency inherently puts the agents fiduciary duty of loyalty at risk.
Undisclosed Dual Agency is illegal in New York State.
Instead, the agent should notify both parties and have them sign the Agency
Disclosure form, which states that the agent is acting as a dual agent. This is known as
Advance Consent to Dual Agency.
Dual Agency With Designated Agents - ✔✔A broker may elect to have designated
agents within his/her office to represent both sides in the transaction.
In this case, one designated agent will represent the seller and another designated
agent will represent the buyer.
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