Real estate brokers and licensees have been known as agents for so long that the term is taken for granted. Not anymore. As of November 1, 2000, agents will cease to exist in the state of Oklahoma when the state's new brokerage relationships act goes into effect.

Sponsored by the Oklahoma Association of REALTORS® (OAR) and endorsed by the Oklahoma Real Estate Commission (OREC,) The Broker Relationships Act will outline the types of relationships that Oklahoma-licensed brokers can have with the public. It will also set forth the duties of brokers and their salespersons (licensees) for the first time, says Anne Woody, deputy director of OREC.

"OREC was in support of the bill because it outlines the duties of licensee in a transaction and that had never been done before," says Woody.

According to the new law, there are only two kinds of relationships that brokers can have with consumers.

transaction broker - this relationship is defined as a broker who with or without a contract provides services by assisting a party in a transaction without being an advocate for the benefit of that party.

single party broker - this relationship describes the broker who has entered into written agreement with a party to provide services for the benefit of that party. If a party has not entered a written agreement, the broker is, by default, operating as a transaction broker.

The new law also outlines vicarious liability on the part of the consumer. If a consumer engages a broker as a transaction broker, the consumer is not held vicariously liable for the acts or omissions of a real estate licensee who is providing services as a transaction broker under Section 858-351 through 858-363 of the act. But the consumer may be vicariously liable for the acts or omissions by the single party broker to which he or she is under contracted representation.

Although the consumer shares liability with the broker in the same way he or she would if the broker were acting as an agent, licensees can not, according to the new law, act as agents for any party, or as subagents of other brokerages.

According to Woody, the word agent has been misused for far too long, regarding agency practices in the real estate industry. "Brokers aren't truly agents," explains Woody. "They can't act for another person, such as in the signing of documents. If they could, they would have power of attorney.

"They are referred to as agents, but Black's Law Dictionary defines an agent as authorized to act for or in place of a party. Even in negotiations, a broker is more likely to simply relay information, not to act for the party."

Realtors perform more as "special agents," described by Black's Law Dictionary as one employed to conduct a piece of business for his/her principal who has authorized him/her to perform a specified act - an agent authorized to conduct a single transaction or a series of transaction not involving continuity of service.

"That is closer to what licensees are," says Woody. "They have a limited time of service and limited duties. We require them to have a termination date on all their contracts.

What relationship is closest to being that of an agent? "An attorney is closer to being an agent because they can sign on behalf of someone," says Woody. "There are about 20 other states that have gone this way. Our law more closely describes what they do, rather than being called an agent."

Because it is breaking new ground, Oklahoma's new broker representation law has raised some questions, and it is not without its critics. Two owners of competing real estate schools in Oklahoma are raising issues not only over its implementation, but how they are going to teach it. Find out who they are and the questions they are asking in tomorrow's Agent News. Part II - How Does Oklahoma's New Broker Representation Law Benefit Consumers and Agents? will run tomorrow.

Published: August 21, 2000

Use of this article without permission is a violation of federal copyright laws.

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