Entry 2307.1 - Calculating Square Footage in Residential Properties, Part 4

Agency Compliance and the Real Estate Commissions Square Footage Guidelines – Part 4.

In the Introductory paragraph of the NC Real Estate Commissions Square Footage

Guidelines there is a quick discussion that the space needs of homeowners are probably the

most important factor they consider when buying or renting a residence. That point is

followed by a reference specifically about real estate agents carefully following these

guidelines when they elect to report square footage of a residence, and they should be

prepared to identify the measuring method used. There is a very important and specific word

that brokers should immediately recognize in the previous sentence. That word used is

“Agent”.

It is fundamentally important that brokers recognize anytime they read the word “Agent” in

any reference or resource about real estate brokerage, they must know and understand that

word is not used casually but is used specifically to acknowledge that word is of the utmost

importance and invokes the legal duties and responsibilities they are now required to

provide. When brokers enter into an agency agreement, they instantaneously accept all the

fiduciary duties and responsibilities of that agency agreement. They are no longer simply a

real estate broker. They now have accepted and must provide all the legal requirements of

the agency representation (Listing agreement, Leasing agreement, or as a Buyer’s Agent)

that a fiduciary duty person or firm must provide.

The simplest definition of an agent, from Black’s Law Dictionary, is “acting on behalf of

another”. However, now that you are a real estate broker licensed under NC Real Estate

License Law and required to comply with all NC Real Estate Commission Rules, those laws

and rules require brokers to commit all agency agreements to writing. Now you and your

client have evidence of the agency agreement (including all terms and conditions), which

specifically defines the limits of your authority. Although you and your firm offer the type of

agency you would be willing to provide, your client actually selects the type of agency they

prefer. In other words, neither you nor your firm choose agency, the client chooses agency.

It’s the client that authorizes you to act on their behalf, not the other way around.

So, anytime you read the word “Agent” it invokes the requirement of Fiduciary Duties and

brokers must provide ALL those duties and responsibilities on behalf of their client.

Therefore, even when a broker elects to provide the service of the measurement of a

residence coupled with reporting those measurement results in any promotional or

marketing material, then all the requirements described in the NC Real Estate Commissions

Square Footage Guidelines must be strictly followed. This is because the broker now is

working on behalf of a seller client and therefore, must provide all agency requirements (you

know, those fiduciary duties thing).

Agency compliance includes applying ALL Fiduciary Duties from brokers who elect

to report the results of measuring a residence as the agent of a seller.

The above does not constitute Legal Advice. Therefore, find a competent attorney for legal advice.