new york real estate for brokers, 5th e

© 2013 All rights reserved.Chapter 2 Real Estate Agency Disclosure 1

New York Real Estate for Brokers, 5th e

By Marcia Darvin Spada Cengage Learning


Chapter 2

Real Estate Agency Disclosure


Chapter 2 Key TermsAdvance informed

consent to dual agency

AgentBroker’s agentBuyer’s agentBuyer brokerageClientCustomer

DisclosureDual agent/dual

agencyEstoppelExclusive-right-to-

sellExpress agencyFiduciary/

fiduciary duties


Chapter 2 Key Terms (continued)

First substantive contact

General agentImplied agencyInformed consentOpen listingPrincipal

Seller’s agentSingle agentSpecial agentSubagentUndisclosed dual

agencyUndivided loyaltyVicarious liability


Agency Relationships

PrincipalPrincipal

CustomerCustomer

Agent Agent


Fiduciary Responsibilities Obedience Loyalty Disclosure of

information Confidentiality Accountability Reasonable Care,

Skill, and Diligence

© 2013 All rights reserved.

MisrepresentationA false

representation of a material fact

A person making the false representation knew or should have known it to be false

A person acts or does not act based on the misrepresentation

A person who relies on the misrepresentation in acting or not acting

Chapter 2 Real Estate Agency Disclosure 7


Duties of the Principal to the AgentThe agent should not be liable if the

principal withholds information that

causes the agent to make incorrect

representations to third parties



Latent DefectsHidden or concealed defects that cannot be discovered by ordinary examination or inspection

Buyers may accuse the inspector of failing to notice the problem

A leaky sewer pipe may cause damage to a number of property components



Types of CompensationPercentage of final sales price

Legal

Flat fee paid by seller or buyer

Legal

Net listing Illegal

Franchise fee LegalKickback to non-licensed parties

Illegal

Referral fees to other licensees

Legal


Creation of AgencyAGENCY

AGREEMENT

Implied Actions of the parties

ExpressOral or written


Agency AlternativesBroker’s agentBuyer AgentCooperating agentDesignated agentDual AgencySeller agent Single agentSubagent


Definition of Dual Agent

An agent who is acting as a buyer’s agent and

a seller’s agent in the same transaction

Buyers and sellers may consent to dual agency

in advance of it occurring by indicating

consent on the agency disclosure form


Dual Agency

Unintended

Intended

Undisclosed

Consensual/Informed consent

Designatedagent


Designated Agent Definition

A salesperson or associate broker,

working under the supervision of a

real estate broker, who has been

assigned to represent a client when a

different client is also represented by

such real estate broker in the same

transaction.


Designated Sales Associate

The designated sales

associate and

representative

broker cannot

provide the

fiduciary duty of

undivided loyalty.

Both disclosure

forms include a

section on “dual

agent with

designated sales

associates”


Buyer Agency

Buyer ascustomer

Buyer client

Compensation frombuyer/ seller or both

Fiduciaryrelationship with buyer


The Listing Agreement Exclusive-right-

to-sell

Exclusive agency

Open listing

Exclusive-right-to-rent

Exclusive-right-to represent

( buyer agency)


The Agency Disclosure Form

Sale or rental of 1-4 unit residential properties and condos and coops in any size building

Informs consumers oftheir agency relationship and choices

Used at the first substantive contact or for advance informed consent to dual agency


Two separate agency disclosure forms required

one for

seller/buyer

transactions

another for

landlord/tenant

transactions


Other Types of Disclosure Agency Agricultural districts

Electrical service Lead-based paint Mold Property condition

Radon Stigmatized Property

UFFI Utility surcharge

Uncapped gas wells



Stigmatized Property DisclosureOccupants who have AIDS or other

illnesses not transmitted through occupancy

Properties that were a site of death due to natural causes, accidents, suicide, homicide, crime, and other reasons



What is a natural gas well?

A natural gas

well is a type of

well that is dug or

drilled that yields

or has yielded

natural gas.

Three types:

Oil wells

Natural gas wells

Condensate wells


Dangers of Uncapped Wells Falling in

Leakage of gas

Combustion/Explosion


Disclosure Requirements for uncapped natural gas wells

Disclosure is made before buyer and seller enter into a contract of sale

Seller must disclose to buyer the existence of any uncapped natural gas wells on the property of which the seller has actual knowledge

Cost of capping

should not be

passed to new

property owner


The Well HeadMounted at the opening of the well to regulate and monitor the extraction of hydrocarbons from underground

Prevents leaking of oil or natural gas out of the well

Prevents blowouts due to high pressure formations

Source: NETL – DOE

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