After June 15, we’re required to discuss 2 types of Agency: Designated Agency and the little used Brokerage Agency. Under Designated Agency, the clients have a single Agent (or team) within a Brokerage represent them. The Agent owes the client the usual legal duties including loyalty, avoiding conflicts of interest, full disclosure of relevant information and confidentiality.
Under Brokerage Agency, the client still deals with a single Agent, but ALL the Agents at the brokerage are deemed to be Agents of the client, not just the Agent they’re dealing with. This means ALL the Agents at the Brokerage owe the client all the legal duties explained above. Brokerage Agency is similar to years ago where all Agents were deemed to be Agents of the sellers. The theory was, if the seller paid the Agents’ commission, then all the Agents owed the seller duties of Agency. This type of Agency didn’t accurately reflect buyers’ relationship with the Agents they worked with. We think Brokerage Agency will only be used by smaller Brokerages who act as a team and represent one development. Even though we’re required to discuss Brokerage Agency, we will not be offering it to our clients.