2.1 Ohio Agency Relationships Overview
Key Takeaways
- Ohio agency law is codified in Ohio Revised Code (ORC) 4735.51 through 4735.75; no oral agreement can create a client (agency) relationship.
- A client has a written brokerage agreement and is owed fiduciary duties; a customer receives only ministerial acts and no representation.
- Every brokerage must develop a Consumer Guide to Agency Relationships and provide it at first contact (Ohio Administrative Code 1301:5-6-05).
- An Agency Disclosure Statement (ORC 4735.57) must be signed by all parties before or at the time of signing the purchase contract or lease.
- About 8 to 12 of the 40 Ohio state-portion questions on the PSI exam test agency law, the single most heavily weighted state topic.
How Ohio Frames Agency
Agency is a fiduciary relationship in which a broker acts on behalf of a principal. In Ohio it is governed by Ohio Revised Code (ORC) 4735.51 through 4735.75 and the Ohio Administrative Code (OAC) 1301:5-6 rules. The Ohio salesperson exam is administered by PSI: 120 scored questions split into an 80-question national portion and a 40-question state portion, each requiring 70% to pass. Agency law is the largest state-portion cluster, so expect roughly 8 to 12 state questions drawn from this chapter.
A core distinction the exam tests repeatedly is client versus customer.
| Term | Has written agreement? | Duties owed | Example |
|---|---|---|---|
| Client (principal) | Yes | Six fiduciary duties | Seller who signs an exclusive listing |
| Customer | No | Honesty, fairness, material-fact disclosure only | Unrepresented buyer at an open house |
| In-company / dual | Yes, both sides | Limited, neutral duties | One brokerage on both sides |
Creating an Agency Relationship
Under ORC 4735.55, an agency relationship in Ohio is created only by a written, dated, signed brokerage agreement. A handshake, a verbal promise, or merely showing property does not create a client relationship. The agreement must state the type of representation, the compensation, and a definite expiration date.
Exam trap: "At first substantive contact the agent agreed verbally to represent the buyer." That creates no client relationship in Ohio. Until a written agreement is signed, the buyer is a customer.
Watch the first-contact vocabulary. Ohio law uses two terms: providing the Consumer Guide is keyed to first contact, while the duty to disclose your existing agency role is keyed to the first meeting when contact began by phone or email.
The Six Fiduciary Duties (OLD CAR)
Clients are owed the full fiduciary package under ORC 4735.62. A reliable mnemonic is OLD CAR:
| Letter | Duty | What it requires |
|---|---|---|
| O | Obedience | Follow the client's lawful instructions |
| L | Loyalty | Put the client's interest above the agent's own |
| D | Disclosure | Reveal all material facts known to the agent |
| C | Confidentiality | Protect the client's private information indefinitely |
| A | Accounting | Handle and report all money and documents |
| R | Reasonable care | Act competently and diligently |
Confidentiality and the duty to disclose adverse material facts survive the termination of the agency relationship (ORC 4735.74).
The Two Required Disclosure Documents
Ohio uses two separate documents, and the exam loves to swap their names and timing:
- Consumer Guide to Agency Relationships (OAC 1301:5-6-05). A brokerage-authored brochure, titled in 14-point type, explaining seller agency, buyer agency, dual agency, and the duties owed. It must be provided at first contact, and the consumer signs only to acknowledge receipt.
- Agency Disclosure Statement (ORC 4735.57). A state-prescribed form confirming exactly who each licensee represents in this transaction. It must be signed by all parties before, or at the time of, signing the offer to purchase or lease.
| Document | Authority | Timing | Signature meaning |
|---|---|---|---|
| Consumer Guide | OAC 1301:5-6-05 | First contact | Acknowledges receipt |
| Agency Disclosure Statement | ORC 4735.57 | At/before contract signing | Confirms representation |
Worked example: A licensee meets a walk-in buyer at an open house. She hands over the Consumer Guide at first contact. The buyer later writes an offer; before that offer is signed, the licensee provides the Agency Disclosure Statement confirming she represents the seller. Both documents are required, in that order.
Ministerial Acts and Customer-Level Service
A customer is owed only honesty, fairness, and disclosure of known material defects. The licensee may still perform ministerial acts, defined in ORC 4735.01 as routine, non-discretionary tasks that do not amount to representation.
| Ministerial act (allowed for a customer) | Crosses into agency (not allowed without a client) |
|---|---|
| Handing over a blank standard contract form | Advising what price to offer |
| Scheduling a showing | Negotiating terms on the customer's behalf |
| Stating factual property data (square footage, taxes) | Recommending how to structure financing |
| Delivering documents between parties | Disclosing the other party's confidential information |
If a licensee starts giving advice or advocating, they risk creating an unintended agency or, worse, undisclosed dual agency. The exam tests whether you can tell a ministerial act apart from a fiduciary one.
Disclosure When Contact Begins by Phone or Email
Ohio has a special rule for remote first contact. If the earliest contact is by telephone or electronic mail, the licensee must disclose by that same medium the nature of the agency relationship the licensee already has with the seller and the buyer, then deliver the written Consumer Guide at the first in-person meeting that follows.
Worked example: A buyer emails a listing agent asking about a home. The agent must reply by email that she represents the seller, then provide the printed Consumer Guide when they meet to view the property. Failing to make the medium-matched disclosure is a common ORC 4735.57 violation.
Why This Matters for Discipline
Violating agency-disclosure timing is one of the most frequently cited offenses in Ohio Real Estate Commission discipline cases. The penalties under ORC 4735.18 range from a reprimand to fines, suspension, or revocation, and an aggrieved consumer may also recover from the Real Estate Recovery Fund. Treat the disclosure timeline as a bright-line compliance rule, not a formality, and you will answer the agency-overview questions correctly.
When must an Ohio licensee provide the Consumer Guide to Agency Relationships?
In Ohio, what is required to create a client (agency) relationship?