Law of Agency and Agency Relationships
Creating and disclosing agency
Agency is a fiduciary relationship created by agreement, usually written. Louisiana licensees must disclose whom they represent early-before confidential information is exchanged-so consumers know whether they are clients or customers. Know the fiduciary duties: loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care. Confidentiality can survive termination for information gained during the relationship.
Louisiana’s facilitator option
Louisiana recognizes the facilitator, a licensee who assists a transaction without representing either party as an agent. A facilitator must be fair and honest but does not owe the full fiduciary package to either side. Questions often try to make a facilitator sound like a dual agent; they are not the same. Dual agency-representing both buyer and seller-requires informed written consent from all clients. Undisclosed dual agency is a violation.
Traps
Watch for: a buyer asking the listing agent for advice (the agent represents the seller); a subagent being assumed without consent; compensation coming from the seller but the agent representing the buyer; and “transaction broker” language that does not fit Louisiana’s facilitator framework. Also remember that the broker, not the salesperson, is the legal agent; the salesperson acts on the broker’s behalf.
Rule of thumb
“Who do I represent, and did I say it in writing?” Worked example: A listing broker’s cousin wants to buy the listing. The broker should not quietly represent both. The broker must disclose the conflict, obtain written consent for dual agency from seller and buyer, or refer the cousin to another licensee.