© 2015 OnCourse Learning

Texas Real Estate Brokerageand Law of Agency, 6th Edition

CREATION OF THE AGENCY RELATIONSHIP

© 2015 OnCourse Learning

Chapter 2

When And How An Agency Relationship Is

Created• Relationship between principal and

agent is a fiduciary one • Fiduciary relationship arises early in

the transaction, when confidences are exchanged– which can occur prior to any

employment contract or express agency relationship.

© 2015 OnCourse Learning

Agency Cases:• Wilson v. Donze• Kelly v. Roussalis• Canada v. Kearns

© 2015 OnCourse Learning

Agency Agreements

• Agency by Actual Authority– either expressed or implied

• Agency by Ostensible Authority• Agency by Ratification

© 2015 OnCourse Learning

Special Rules For Real Estate – Licensure

• The License Act is a general law that applies to all persons who engage in real estate

• Intent is to avoid fraud on public by requiring a license of anyone who deals in real estate for others

© 2015 OnCourse Learning

Broker Definition• A real estate broker is defined by the Texas Real Estate License Act as follows:–Review Section 1101.002

© 2015 OnCourse Learning

“Real estate broker” means a person who, for another person and for a fee:• sells, exchanges, purchases, rents,

leases (or offers to) real estate;• negotiates or attempts to negotiate

the listing, sale, exchange, purchase, rental, or leasing of real estate;

• lists real estate for sale, rental, lease, exchange, or trade;

© 2015 OnCourse Learning

Real Estate Broker, etc.

• auctions, or offers to auction, real estate;

• deals in options on real estate;• aids, attempts, or offers to aid in

locating real estate;• procures or assists in the procuring

of prospects;© 2015 OnCourse Learning

Real Estate Broker, etc.

• procures or assists in procuring property ;

• controls the acceptance or deposit of rent;

• provides a written analysis, opinion, or conclusion relating to the estimated price of real property;

© 2015 OnCourse Learning

TREC frequently revises its regulations which are

available on TREC Web site. Here are some of them:

• § 535.4 Nonresident Agents• §535.5 License Not Required

for Principal• §535.4 Managing Rentals,

Sales, for Corporations, and Negotiations

© 2015 OnCourse Learning

TREC Regulations, cont’d• §535.16 Net Listings • § 535.17. Broker Price Opinion or Comparative Market Analysis

• §535.20 Valuable Consideration• §535.31 Exemptions: Attorney at Law

© 2015 OnCourse Learning

TREC Regulations, cont’d• 535.32. Exemptions: Attorneys in fact

• §535.33. Public Officials• §535.34. Exemptions: Salesperson’s Employed by an Owner of Land and Structures Erected by the Owner

© 2015 OnCourse Learning

Pertinent Cases of Licensure

• Collins v. Beste• Gamble v. Norton, • Friendswood Development Company

v. McDade + Company,• Warner Communications, Inc. v.

Keller • Trammel Crow Company No. 60, et al.

v. William Jefferson Harkinson,© 2015 OnCourse Learning