Authorized Broker Relationships

Transaction Broker

Under Florida law, real estate licensees are presumed to be working as transaction brokers unless they have entered into another brokerage relationship with a customer.  Because of this presumption, the licensee need not provide a brokerage relationship notice to the customer.  A transaction broker provides limited representation to a buyer, a seller, or both in a real estate transaction, but does not represent either party in a fiduciary capacity.  The customer is not responsible for the acts of a transaction broker.  A recent survey by the Florida Realtors® showed that nearly 70% of the Realtors® worked exclusively as transaction brokers.

A transaction broker owes the following seven duties to the customer:

1. Dealing honestly and fairly.
2. Accounting of all funds.
3. Using skill, care and diligence in the transaction.
4. Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer.
5. Presenting all offers and counter offers in a timely manner, unless a party has previously directed the licensee otherwise in writing.
6. Limited confidentiality, unless waived by a party.  The transaction broker may not reveal to either party:
• that the seller might accept a price less than the asking or list price,
• that the buyer might pay a price greater than the price submitted in a written offer,
• the motivation of any party for selling or buying property,
• that a seller or a buyer will agree to financing terms other than those offered, and
• any other information requested by a party to remain confidential.
7. Any additional duties that are entered into by this or a separate agreement.

Single Agency Relationship

A single agent represents either the buyer or the seller, but not both, in a transaction.  The principal¹ relies on the single agent to give skilled and knowledgeable advice and to help negotiate the best terms in dealings with the customer.  Because only single agency creates a fiduciary relationship², only single agents may call their customers "principals". The principal is responsible for the acts of his single agent.

A single agent owes the following nine duties to the principal:

1. Dealing honestly and fairly.
2. Loyalty.
3. Confidentiality.
4. Obedience.
5. Full disclosure.
6. Accounting for all funds.
7. Skill, care and diligence in the transaction.
8. Presenting all offers and counter offers in a timely manner, unless a party has previously directed the licensee otherwise in writing.
9. Disclosing all know facts that materially affect the value of residential real property and are not readily observable.

No Brokerage Relationship

A buyer or seller can choose to not be represented by a real estate broker and would be a "customer" of the broker.  Licensees working with no brokerage relationship to the customer owe the following three duties:

1. Dealing honestly and fairly.
2. Disclosing all known facts that materially affect the value of the residential real property that are not readily observable to the buyer.
3. Accounting for all funds entrusted to the licensee.

The duties of a licensee who has a no brokerage relationship with a buyer or a seller must be fully described and disclosed in writing to the buyer or the seller.  The no brokerage relationship notice must be given to the prospective buyers and sellers of residential property before showing a property.

The Designated Sales Associate

A broker may legally appoint one sales associate in the firm to act as the agent for the buyer (or lessee) and another sales associate in the firm to act as the agent for the seller (or lessor).  This status may be used only in a nonresidential transaction.  In this status, each designated sales associate is an advocate for the party he or she represents in the transaction and can actively help in the negotiations.  The broker, however, must remain neutral.  To meet the requirements of the law, buyers and sellers must have personal assets of at least $1 million, must sign disclosures that their assets meet the requirement, and must request this representation status.  The licensees must give the parties a designated sales associate notice.

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1.  The person who enters into a fiduciary relationship with a single agent licensee.

2.  An alliance of trust and confidence that creates a moral and legal obligation when extended by one person and accepted by another.