In which scenario would a sub-agency NOT exist?

In which scenario would a sub-agency NOT exist?

• A. A licensee is representing the seller only
• B. A licensee helps a buyer make an offer without a signing agreement
• C. A licensee presents offers on behalf of an unrepresented buyer
• D. A licensee represents a buyer customer with a valid agreement

Answer: (D)

A sub-agency typically does not exist when a licensee is representing a buyer customer with a valid agreement. In this scenario, the licensee has a direct agency relationship with the buyer, meaning their fiduciary duties—such as loyalty, obedience, and disclosure—are clearly defined and directed towards that buyer. In agent relationships, sub-agency arises when one agent, known as the sub-agent, acts on behalf of another agent, who is the primary agent for a client. This means that the sub-agent does not have a direct relationship with the principal (the individual who the agency represents) but instead works under the authority of the primary agent. When a licensee represents a buyer with a valid agreement, they do not require the involvement of a sub-agent as they are already acting on behalf of that buyer. The relationship is clear, and there are no intermediary parties who would otherwise complicate the agency’s obligations or the representation.

A sub-agency typically does not exist when a licensee is representing a buyer customer with a valid agreement. In this scenario, the licensee has a direct agency relationship with the buyer, meaning their fiduciary duties—such as loyalty, obedience, and disclosure—are clearly defined and directed towards that buyer.

In agent relationships, sub-agency arises when one agent, known as the sub-agent, acts on behalf of another agent, who is the primary agent for a client. This means that the sub-agent does not have a direct relationship with the principal (the individual who the agency represents) but instead works under the authority of the primary agent.

When a licensee represents a buyer with a valid agreement, they do not require the involvement of a sub-agent as they are already acting on behalf of that buyer. The relationship is clear, and there are no intermediary parties who would otherwise complicate the agency’s obligations or the representation.