Agency
What the exam tests
Agency tests how representation is created, the fiduciary duties owed, the permitted agency models in Pennsylvania, and how agency terminates. Expect fact patterns about dual agency, designated agency, transaction licensees, and confidentiality after termination.
Core rules
- Agency is created by written agreement, ratification, estoppel, or operation of law; Pennsylvania brokerage relationships must be documented in writing.
- Fiduciary duties include loyalty, obedience, disclosure, confidentiality, reasonable care, and accounting.
- Pennsylvania recognizes seller agency, buyer agency, dual agency, subagency, and transaction licensee status; a transaction licensee is not an agent and owes limited duties.
- Dual agency requires informed written consent of both parties. Designated agency may allow different licensees in the same brokerage to represent buyer and seller, but the broker remains responsible for supervision.
- Confidential information learned during the agency survives termination unless it becomes public or the client consents.
Worked example
A buyer calls the listing agent and reveals she will pay $30,000 above list. The listing agent represents the seller. Unless a buyer agency agreement with informed consent is created, the buyer is a customer; the agent’s duty runs to the seller, and the buyer’s statement is not confidential. The agent should explain representation and, if the buyer wants confidentiality, obtain a written buyer agency agreement or explain transaction licensee status.
Traps that cost marks
Do not assume “dual agency” is automatic from a single phone call. Do not confuse a customer with a client. Do not treat confidentiality as ending at closing. Do not let a transaction licensee give fiduciary advice while claiming no agency.