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What are the limits of a broker's authority?

When I moved to America, I hired an architect to build my house, and she hired some contractors whom I didn’t like. She explained that she had the authority to contract in my name. I want to list my house for sale with a real estate agent soon, but I am a little nervous about someone representing me. What if he/she consents to a sales agreement that I don’t like? Can I protect myself from this when I list with a Realtor?

ANSWER:

An architect’s duties and responsibilities are very different from those of a real estate agent. An architect, as the agent of the owner, has broad authority in supervising the construction or renovation of a building. He can create a contract in the name of the owner but he cannot change the agreements of sale signed by the owner and the builder. He can certainly make day-to-day decisions that relate to the quality of the builder’s work or the materials.

A real estate broker is a special agent with only limited authority. He is hired to find a purchaser for the property by the property’s owner. In some areas, listing contracts do authorize the execution of a sales agreement by the broker and do use phrases like "and to contract in my name." It is more common to include this authority if there is an unusual situation, such as the owner’s unavailability because of an extended trip into a remote area. This is rare in today’s world of high speed communication, cellular phones, fax machines and the Internet.

The problem of a real estate agent exceeding his authority is more common when the agent is trying to be accommodating. Brokers sometimes permit the buyer to move in before a closing, to leave some items on the premises or to permit access to begin redecorating. These accommodations should not be granted without the permission of the owner. In fact, the liability issues that early occupancy create suggest that the advice of an attorney should also be sought.

You should be well protected from an agent’s exceeding his authority when you list your house for sale. Authority to perform one function cannot be expanded to authority to do other things. Be sure that you discuss specific issues that concern you when you list the property with an agent.

This information is not intended as specific legal advice to anyone and is based upon facts that change from time to time. Individuals should seek legal counsel before acting upon any matter involving the law.

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