Florida brokerage relationships: single agent, transaction broker and the disclosures

Authorized relationships, duties and disclosure is 7% of the exam: seven questions. The whole law is one section, F.S. 475.278, and almost every question turns on the same three decisions: which relationship is in play, whether a written notice was required, and whether it arrived in time. Make those three calls and the duty lists further down are bookkeeping. An orientation, not legal advice. Leer en español.

The starting rule: transaction broker by default

In Florida a licensee is presumed to be a transaction broker unless another relationship is established in writing. Dual agency (representing both sides as an agent with full fiduciary duties) is prohibited. Those two sentences answer several questions on their own.

How the exam asks it

Count the duties. Nine, seven, three. If a question describes a duty, decide first which relationship it belongs to.
Look for the words “written” and “before”. Nearly every disclosure question turns on whether a notice was required, whether it had to be written, and whether it came in time.
Residential or not. Four units, ten acres. If the transaction is not residential, the notices are not required and the designated sales associate becomes possible.

The three relationships and their duties

Single agent (475.278(3))

Represents one party as a fiduciary. The client is the principal. Nine duties:

Dealing honestly and fairly.
Loyalty: the client's interests above everyone's, including the licensee's own.
Confidentiality.
Obedience: to lawful instructions within the agreement only.
Full disclosure.
Accounting for all funds.
Skill, care and diligence.
Presenting all offers and counteroffers in a timely manner.
Disclosing known facts that materially affect the value of residential property and are not readily observable.

Transaction broker (475.278(2))

Provides limited representation to one or both parties, called customers, without being a fiduciary to either. Seven duties: honesty and fairness, accounting for funds, skill and care, disclosing known material facts, presenting offers, limited confidentiality (not revealing that a party will accept less or pay more, their motivation, or information they asked to keep confidential), and any additional duties agreed to. Note what is not there: loyalty, obedience and full disclosure belong to the single agent only.

No brokerage relationship (475.278(4))

The licensee does not represent that party. Even so, three things are owed: honesty and fairness, disclosing known material facts, and accounting for funds. These duties must be described in writing before showing the property (475.278(4)(b)). Honesty is owed always, in every relationship, and knowingly taking part in a false loan application violates it (F.S. 475.25(1)(b)).

The disclosures: when a written notice is required

Written notices are required only in a residential sale, which 475.278(5) defines in three parts: residential property of four units or fewer, unimproved residential land for four units or fewer, and agricultural property of ten acres or fewer. What decides is the acreage or the unit count, not what the buyer intends to do.

Single agent notice: in writing, before or at the time of signing the listing or representation agreement, or before showing the property, whichever comes first.
No brokerage relationship notice: in writing, before showing the property.
Transaction broker: since 2008 no written notice is required, because it is the presumed relationship. Many candidates miss this by studying old material.
Transition (consent to transition): moving from single agent to transaction broker requires the principal's prior written consent (475.278(3)(c)2.). The signature has to come before the change, never at the moment or after.
Designated sales associate (F.S. 475.2755): only in non-residential transactions where buyer and seller each have assets of at least a million dollars. Two sales associates of the same broker each act as single agent for one side.

What Chapter 475 does not say: agency at common law

The statute is silent on several things the exam does ask; there, Florida's common law of agency governs.

How agency is created: by express agreement, by conduct (implied), by ratification (the principal later adopts an unauthorized act and is bound as if it had been authorized from the start), or by estoppel (the principal's own conduct led a third party to believe there was an agency).
Which duties survive the relationship: only two, confidentiality and accounting for funds. Loyalty, obedience and disclosure end with the relationship.
Subagency: an agent working for another agent's principal through a chain of authority.
Agency coupled with an interest: the agent's interest is in the subject matter itself, such as a stake in the property. An interest in the commission does notcount; every agent has that.
Vicarious liability (respondeat superior): the broker answers for a sales associate's acts within the scope of the work.

Material facts and stigmatized property

Disclosing known material facts is a duty in all three relationships. But F.S. 689.25 says what is not a material fact: that a homicide, suicide or death occurred on the property, or that an occupant had HIV or AIDS. The exam asks it backwards: “which of these does NOT have to be disclosed?”

Practice this topic with real questions

Nearly 50 live questions on brokerage relationships, each linked to F.S. 475.278. The first 30 are free, no sign-up.

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