Question:
Could you explain the difference between express and implied agency?
Answer:
You are concerned about the express and implied agency arrangements.
For express agency, there’s always an actual “agency appointment”. It may be written or it may be verbal. Usually, it starts out as a verbal commitment and then it is reduced to writing afterwards.
For example, a Sales Representative is approached by a prospect at an Open House. They speak on Tuesday evening the prospect is seeking “an agent”. The Sales Representative agrees, sends some listings over the next few days and meets with the individual on Saturday to view some houses. At that point, they sign a Buyer Representation Agreement. In this case, the agency appointment took place on Tuesday, later it was formalized and reduced to writing.
For implied agency, we have basically four situations in which that might arise. It’s important here to be aware of the fact that there’s “no paperwork” and figuring out the exact time of commencement may be difficult. However, once the interaction between the Principal and Agent continue over a period of time, it will be possible to determine from the facts, that there has been and implied agency created.
The four methods to establish implied agency are:
- Estoppel,
- Ratification,
- Necessity, and
- Conduct.
Briefly, with estoppel, the Principal acted as if the agent was his agent and is later precluded from denying this fact. With ratification, the Principal comes along after the fact, likes what the agent did, ratifies the agent’s conduct, thereby creating an agency appointment. Necessity is rather rare, but it does arise on occasion. Conduct undertaken by the registrant which crosses over the boundary between information and advice will be sufficient to create an agent relationship.
Brian Madigan LL.B., Broker
Comments 4
A past client of mine contacts the listing Realtor via email and asks for information about a property she has just placed on MLS. The listing realtor, via email, asks the Prospective Buyer if he is working with a Realtor. He replies that he has recently talked to me about one of my listings. (The Buyer has used me in the past to sell his property and purchase another property). The Listing realtor’s reply was “I wish you luck in your real estate search”.
The buyer immediately contacts me to ask if I could show him the house. He does not advise me that he contacted the listing realtor about her listing. I sent him a copy of the MLS listing and requested a showing for the next day with the Listing Realtor. The listing Realtor refused my showing request and asked if the showing was for and named the buyer who sent her an email. She said her seller will not permit that Buyer to view the property without me first providing evidence that I had a signed Buyer Agency for this Buyer. I do not have a Buyer Rep signed with this particular Buyer. He is a personal family friend and a past client who has bought and sold using my services on more than one occasion.
I advised the listing realtor that I was not obligated to disclose to her the name of my Buyer nor was I obligated to produce to her evidence of a signed Buyer Agency Agreement. I called my past client and he told me that he contacted her direct from her website that was promoting the property and asking people to contact her for more info.
Needless to say, the Buyer was dismayed that a simple viewing of an MLS listing was being denied. He also felt he was targeted in a negative way for sending the listing realtor a message asking about the property and then not asking her to show it to him.
After I told the Listing Realtor I would not confirm the name of my Buyer, she advised me if I showed the property and claimed I had a buyer agency signed when I did not that I would be lying and the RECO fines were significant.
What is the correct course of action in this situation? I know that I could ask my past client to sign a Buyer’s Rep to view this specific property and he would but it seems that he is being coerced into it. It also seems that the Listing Realtor is interfering in my business. This is a past client of mine whom I chose to trust to continue to work with me without the need to sign a Buyer Rep at this point in his home search.
Author
You are quite correct.
The Listing agent cannot ask to see your BRA or any other agency documents.
The Buyer can be a SRP, and you can still show them the property.
Report them to the local Board or speak with their BOR.
With regards to the comment above, I had a typo in my email address which is corrected below
Author
noted