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Chapter 2 Law of Agency and Broker Ethics
1
New Jersey Real Estate for Salespersons and Brokers
By Marcia Darvin SpadaThomson/South-Western
Copyright, 2006
Chapter 2 Law of Agency and Broker Ethics
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Chapter 2
Law of Agency and Broker Ethics
Chapter 2 Law of Agency and Broker Ethics
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Chapter 2 Key Terms Agent Client Consumer
Information Statement
Cooperating agent Customer Dual agency/ Disclosed dual
agent
Fiduciary Property condition
disclosure Self-dealing Special agent Subagents Transaction
broker Vicarious liability
Chapter 2 Law of Agency and Broker Ethics
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Agency Relationships
Principal
Customer
Agent
Chapter 2 Law of Agency and Broker Ethics
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Creation of Agency
AGENCY AGREEMENT
Implied- Actions of the partiesExpress-Oral or written
Chapter 2 Law of Agency and Broker Ethics
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Types of Agency Single agent Seller agent Subagent Disclosed dual agent Buyer Agent Cooperating Agent Transaction broker
Chapter 2 Law of Agency and Broker Ethics
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Broker EthicsFiduciary Responsibilities
Reasonable Care
Undivided Loyalty
Confidentiality Full Disclosure
Chapter 2 Law of Agency and Broker Ethics
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Seller Property Condition Disclosure
Presented before buyer signs contractof sale
May help protect licensees from
liability
OptionalStatement
Presented to buyer
CompletedBy Seller
DisclosureStatement
Chapter 2 Law of Agency and Broker Ethics
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The Consumer Information Statement
Used for: Sale of 1-4 unit
residential property Sale of vacant 1-
family lots Residential lease
transactions (except short-term rentals)
Brokerage agreements on residential properties
Chapter 2 Law of Agency and Broker Ethics
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Business Relationships
Brokerage agreements
must indicate business
relationships a licensee
may have with the
other party in the
agreement.
Seller’s agent only
Buyer’s agent only
Seller’s agent and disclosed dual agent if opportunity arises
Buyer’s agent and disclosed dual agent if opportunity arises
Transaction broker only
Seller’s agent on property for which the firm acts as the seller’s agent and transaction broker on other properties
Chapter 2 Law of Agency and Broker Ethics
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Broker Ethics and Antitrust Laws
Federal Antitrust Laws and Agencies
Sherman Act (1890) Clayton Act (1914)
Federal Trade Commission
U.S. Dept. of Justice
Chapter 2 Law of Agency and Broker Ethics
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Types of Restraints of Trade
Price fixing
Group boycotts
Market allocation agreements
Tie-in arrangements
