1. © 2015 OnCourse Learning Texas Real Estate Brokerage and Law of Agency, 6 th Edition

2. Fiduciary Obligation – Duty of Care to Principal © 2015 OnCourse Learning Chapter 3

3. Duties of Care Texas law has generally recognized four duties of care from the agent to the principal – Performance – Reasonable care – Loyalty – Accounting © 2015 OnCourse Learning

4. Performance Performance can be described as the agent doing his or her job Primary responsibility of the seller’s agent is the duty of obtaining the highest price then obtainable and known to the agent. – Riley v. Powell © 2015 OnCourse Learning

5. REASONABLE CARE The duty of reasonable care generally implies competence and expertise on the part of the licensee Licensees have been issued a license and permitted to hold themselves out to be qualified by training and experience to render a specialized service – Walker v. Ruggles © 2015 OnCourse Learning

6. Loyalty And Proper Disclosure It has been held by at least one court that the fiduciary duty of loyalty is the chief virtue required of the broker This loyalty includes the duty of care of putting your principal’s interest above that of your own © 2015 OnCourse Learning

7. Flip Closings Increase in Value Financial Status Potential Litigation Agent is a Purchaser – Culver v. Jaoudi Industries © 2015 OnCourse Learning

8. Loyalty Issues MLS® Burglaries Offer to Purchase Amended Contracts – Ramsey v. Gordon. – Weitzel v. Barnes © 2015 OnCourse Learning

9. Accounting Any and all funds that come into the hands of real estate agents that belong to another are trust funds for which there are specific rules for accounting Should be accounted for separately and deposited by the second banking day following the receipt of the funds in a non- interest- bearing trust account, © 2015 OnCourse Learning

10. License Suspension and Revocation Section 1101.652 of the Texas Real Estate License Act provides that an agent’s license may be suspended or revoked for certain breaches of duty to the seller – Also applies to breaches of duty to buyer client © 2015 OnCourse Learning

11. NONTERMINATION OF FIDUCIARY DUTIES Once brokers have obtained the confidence and trust of the principal, they can’t turn around, shed their fiduciary obligations – Coldwell Banker v. Camelback Office Park – Dismuke v. Edina Realty, Inc. © 2015 OnCourse Learning

12. Duties of Care of the Cooperating Broker It is extremely important for the real estate co-op licensee to know and understand the fiduciary duties of care to the principal The cooperating broker is generally regarded as the selling broker who is not the listing broker and has no contract with the principal © 2015 OnCourse Learning