Agency Relationships and Disclosure Flashcards

When a Texas license holder represents a seller, which of the following must the license holder disclose to a prospective buyer?

Answer: All material facts about the property known to the license holder

A seller's agent has a duty of honesty to the buyer and must disclose all known material facts about the property that could affect the buyer's decision, even while representing the seller.

An agency relationship in Texas real estate can be created by all of the following EXCEPT:

Answer: A license holder simply handing a buyer a property flyer

Merely providing a property flyer does not create an agency relationship; agency requires agreement, either written, oral, or implied through substantive actions that indicate representation.

What does 'ratification' mean in the context of Texas real estate agency law?

Answer: A principal accepting and confirming an agent's unauthorized acts after the fact

Ratification occurs when a principal accepts the benefits of or confirms an agent's previously unauthorized acts, thereby creating a valid agency relationship retroactively.

Under Texas law, an agent's duty of confidentiality to a former client generally:

Answer: Survives the termination of the agency relationship indefinitely

The duty of confidentiality to a client survives termination of the agency relationship and continues indefinitely, meaning a former client's confidential information cannot be disclosed even after the transaction is complete.

A Texas real estate sales agent receives an earnest money deposit from a buyer. The agent must:

Answer: Deliver the earnest money to their sponsoring broker promptly

A sales agent has no authority to maintain trust accounts; all earnest money must be promptly delivered to the sponsoring broker, who is responsible for proper handling and deposit.

Which of the following actions would constitute a breach of an agent's fiduciary duty of loyalty in Texas?

Answer: Purchasing the listed property for the agent's own account without full disclosure

Purchasing a listed property for personal gain without full disclosure to the seller-client is a breach of loyalty and constitutes a conflict of interest that violates the agent's fiduciary duties.

Under TRELA, what must happen for a seller's broker to lawfully become an intermediary in a transaction?

Answer: The broker must obtain written consent from both the seller and the buyer to represent both

To lawfully act as an intermediary, the broker must obtain prior written consent from both the seller and the buyer authorizing the broker to represent both parties in the transaction.