Problem
Sidney Lewenthal is the new owner of a brokerage and property management company in a state allowing either single agency, transactional agency, or dual agency relationships. Sidney is unsure about which type of agencies the new brokerage should allow his agents to practice under his license. In the past brokerage where Sidney worked, they often had complaints that the agent did not inform them appropriately and some principals claimed that the price they were willing to pay was divulged to the seller.
Sidney is also not sure whether to charge management fees for property management based on NOI or EGI.
Task
1. Describe the fiduciary duties and how they relate to real estate agency.
2. Explain the agency problem at Sidney's past brokerage using an agent's fiduciary duties.
3. Determine how Sidney can address past concerns when selecting the type of agency or agencies for the new brokerage.
4. Explain how the broker could have dealt with these issues.
5. Describe the agency types allowed in the state where Sidney is opening a new office.
6. Determine the duties and the responsibilities involved with adopting the agency type(s) that you would choose for this new brokerage and the agents.
7. Provide a convincing argument for the agency types that should be adopted in the new brokerage company.
8. Recommend the basis Sydney should use for charging property management fees, NOI or EGI, and provide a convincing argument for your choice.