General Principles of Agency

Client

Person who employs a broker, lawyer or other professional.

Customer

A party in a transaction to whom an agent does not have a fiduciary duty or relationship, but to whom an agent must still be fair and honest.

Subagent

An agent of an agent; a person that an agent has delegated authority to, so that the subagent can assist in carrying out the principal's orders.

Agency

A relationship of trust created when one person (the principal) gives another person (the agent) the right to represent the principal in dealings with third parties.

Dual Agency

When a broker or salesperson represents both parties (buyer and seller) in a transaction, AND all management level licensees at a brokerage.

Commingling

Illegally mixing money held in trust on behalf of a client with personal funds.

Fraud

An intentional or negligent misrepresentation or concealment of a material fact; making statements that a person knows, or should realize, are false or misleading.

General Agent

An agent authorized to handle all of the principal's affairs in one area or in specified areas.

Fiduciary

Person in a position of trust, held by law to high standards of good faith and loyalty.

Conversion

1. Misappropriating property or funds belonging to another. 2. Changing an existing rental apartment building into a condominium.

Puffing

Superlative statements about the quality of a property that should not be considered assertions of fact. 'The best buy in town,' or 'A fabulous location'

Principal

1. A person who grants another person (an agent) authority to represent him or her in dealings with third parties. 2. One of the parties to a transaction (such as a buyer or seller), as opposed to those who are involved as agents or employees (such as a b

Escrow

The system in which things of value (e.g. money or documents) are held on behalf of the parties to a transaction by a disinterested third party (called an escrow agent), until the specified conditions have all been complied with.

Misrepresentation

A false or misleading statement.

Single Agency

When a real estate broker acts as an agent to only the seller or only the buyer

Special Agent

An agent with limited authority to do a specific thing or conduct a specific transaction.