“Agency Law,” as it pertains to real estate in Florida, refers to when a real estate agent enters into a relationship with a buyer or seller. The agent in these relationships owes the client a fiduciary duty of loyalty and confidentiality. This arrangement in Florida is a single agency.
Florida Statutes codify how a real estate licensee must work with both buyers and sellers of property. These Statutes protect the public when interacting with real estate agents. A licensee in Florida has an ethical and legal duty to the “principal,” which refers to a buyer or a seller in a transaction. The relationships that licensees in Florida are allowed to share with principals fall into one of three categories — no brokerage relationship, transaction brokers, and single agency.
No Broker Relationship
A licensee in Florida is prohibited from having a broker relationship with one or both parties in a transaction. Even though details about this status must be disclosed to the principal, a licensee with this relationship must also account for any funds that are received, deal fairly and honestly, and disclose all known facts about a property’s value.
Transaction Broker
Often, the type of agency relationship in Florida involves a transaction broker. For example, this relationship exists when a residential property is bought and sold. In transaction broker relationships, an agent works for the transaction rather than for the buyer or seller. As a result, the real estate agent in this relationship remains a neutral party. However, there are several important duties that a transaction broker must uphold, which include accounting for all funds received from a principal, dealing fairly and honestly, and exercising care throughout the process.
Single Agent
A single agent represents one party in a transaction. Some of the duties that a single agent must uphold include carrying out any legal instructions given by the principal, disclosing everything that is known about a transaction to the principal, and loyalty to the principal. As a result, principals frequently prefer single-agency relationships instead of a transaction-broker relationship because a transaction-broker relationship has less confidentiality.
No Dual Agency in Florida
In dual agency relationships, a realtor is an agent to a property’s buyer and seller. Unlike other states, Florida prohibits dual agency. In comparison, transaction-broker relationships sound like dual agency; a real estate agent in a transaction-broker relationship is committed to the deal rather than the buyer or seller of a property.
Licensees must disclose and agree to their relationship with a new client as soon as practicable. The client signs a disclosure document agreeing to the type of representation if it is not that of a Transaction Broker. The law assumes that a licensee will automatically behave as a Transaction Broker, so if they are going to act as a Single Agent, the client must know what that entails, and sign that they agree. Contact your trusted real estate attorney if you have any questions regarding Agency Law related to Florida Real Estate.
