Humber/Ontario Real Estate Course 4 Exam Practice

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A seller and a listing brokerage have entered into a written agency relationship for the sale of the seller's home. What is correct regarding the seller's duties to the brokerage?

  1. The seller owes a duty of loyalty to the brokerage in all his dealings with the brokerage during the marketing of the seller's home.

  2. An agency relationship has been established between the principal (the seller) and the listing agent (the salesperson).

  3. The seller owes a duty of indemnification, which means that he must pay the brokerage for services rendered regarding the listing and selling of the seller's home.

  4. The agency relationship established between the principal and the agent has been created by express agreement.

The correct answer is: The agency relationship established between the principal and the agent has been created by express agreement.

In this scenario, option D is the correct answer because it highlights the fundamental aspect of the agency relationship between the principal (the seller) and the agent (the listing brokerage). When a seller enters into a written agreement with a listing brokerage, an agency relationship is indeed established through an express agreement. This agreement outlines the specific terms and conditions under which the brokerage will represent the seller in the sale of their property. This written agreement is crucial as it clearly defines the responsibilities and duties of both parties, ensuring transparency and clarity in their relationship. Options A, B, and C are incorrect as they do not accurately depict the seller's duties to the brokerage in the context of an agency relationship. While it is true that the seller should cooperate with the brokerage and act in good faith during the transaction (duty of good faith), the duty of loyalty does not extend to all dealings with the brokerage, making option A inaccurate. Option B incorrectly states that an agency relationship is directly established between the principal and the agent, omitting the role of the brokerage, which serves as the agent in this case. Moreover, duty of indemnification (option C) does not typically require the seller to pay the brokerage for services rendered; instead, it involves reimbursing the

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