Key Takeaways
- Pennsylvania recognizes seller agency, buyer agency, dual agency, and designated agency
- Agency relationships in Pennsylvania are created through written agreements
- The Consumer Notice must be provided at the initial interview before discussing confidential information
- Licensees owe fiduciary duties of loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care to clients
- Pennsylvania requires written disclosure of agency relationships before entering into agreements
Pennsylvania Agency Relationships
Important: This content covers Pennsylvania-specific agency law. You should complete the National Real Estate Exam Prep first, as general agency concepts are tested on the national portion.
Pennsylvania law governs how real estate licensees represent buyers and sellers in transactions through the Real Estate Licensing and Registration Act (RELRA).
Types of Agency Relationships
Pennsylvania recognizes the following agency relationships:
| Relationship | Description |
|---|---|
| Seller/Landlord Agency | Broker represents the seller's or landlord's interests |
| Buyer/Tenant Agency | Broker represents the buyer's or tenant's interests |
| Dual Agency | Broker represents both parties (with consent) |
| Designated Agency | Different licensees in same firm represent different parties |
| Transaction Licensee | No agency relationship with either party |
The Broker as Agent
In Pennsylvania, the broker is the agent of the client. Salespersons and associate brokers are:
- Licensed through the broker
- Acting on behalf of the broker in transactions
- Agents of the client through the broker relationship
Creating Agency Relationships
Agency relationships are created through written agreements:
- Listing Agreement - Creates seller/landlord agency
- Buyer Agency Agreement - Creates buyer/tenant agency
- Dual Agency Consent - When representing both parties
- Designated Agency - Within same brokerage
Key Point: Before discussing confidential information or showing properties, the agency relationship should be established or disclosed.
Fiduciary Duties
Pennsylvania licensees owe clients the following fiduciary duties (remembered as OLDCAR):
| Duty | Description |
|---|---|
| Obedience | Follow lawful instructions |
| Loyalty | Put client's interests first |
| Disclosure | Reveal all material facts |
| Confidentiality | Protect private information |
| Accounting | Handle funds properly |
| Reasonable Care | Act competently and diligently |
Duties to Non-Clients (Customers)
Even when not representing a party, Pennsylvania licensees owe:
- Honesty - Cannot make false statements
- Fair dealing - Must treat fairly
- Disclosure of material defects - Must reveal known property issues
- Answer questions honestly - Cannot mislead
Transaction Licensee
A transaction licensee provides services without representing either party:
- No fiduciary duties
- Limited to facilitating the transaction
- Must still be honest and disclose known defects
- Must provide Consumer Notice
Consumer Notice Requirement
Pennsylvania requires a Consumer Notice to be provided:
| Timing | Requirement |
|---|---|
| When | At initial interview, before discussing confidential information |
| Format | Written form prescribed by SREC |
| Content | Explains agency relationships and options |
| Signature | Consumer signs acknowledging receipt |
What the Consumer Notice Contains
The Consumer Notice explains:
- Types of agency relationships available
- Duties owed to clients vs. customers
- How agency is created
- Consumer's right to choose representation
- Dual agency and designated agency options
When Consumer Notice is Required
| Situation | Consumer Notice Required |
|---|---|
| Showing property to potential buyer | Yes |
| Taking a listing | Yes |
| Open house (initial contact) | Yes |
| Responding to sign calls | Yes |
Exam Tip: The Consumer Notice must be provided at the INITIAL INTERVIEW, not after showing property or discussing needs.
Compensation vs. Agency
Important: Compensation does not determine agency.
| Situation | Agency |
|---|---|
| Seller pays buyer's agent | Buyer agency still exists |
| Commission split | Does not create agency |
| Cooperating broker paid by listing broker | May still be buyer's agent |
The written agency agreement, not the source of compensation, determines who the licensee represents.
When must a Pennsylvania licensee provide the Consumer Notice?
What is a transaction licensee in Pennsylvania?