Transaction brokerage: the duties owed and the statutory presumption

Florida's starting presumption

Florida presumes all licensees operate as transaction brokers unless a single agent or no brokerage relationship is established in writing with a customer. Missing paperwork does not mean no duties. Payment of compensation alone does not determine the relationship.

A transaction broker provides limited representation to a buyer, a seller, or both, without representing either as a fiduciary or single agent. Florida prohibits disclosed and nondisclosed dual agency: representing both parties as a fiduciary.

The statutory duties

Florida Statutes section 475.278(2) lists:

• Dealing honestly and fairly.
• Accounting for all funds.
• Using skill, care, and diligence in the transaction.
• Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer.
• Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing.
• Limited confidentiality, unless waived in writing by a party.
• Any additional duties that are mutually agreed to with a party.

Limited confidentiality protects the seller's willingness to accept less than the asking or listed price; the buyer's willingness to pay more than the price submitted in a written offer; buying or selling motivations; willingness to accept financing terms other than those offered; and other information a party requests remain confidential. A confidentiality request does not cancel the duty to disclose a qualifying property fact. Protect a seller's private price flexibility, but disclose a known, hidden residential defect that materially affects value.

Apply the distinctions

An oral instruction to withhold certain offers does not satisfy the prior-written-direction exception. A waiver of limited confidentiality must also be written.

An existing single agent relationship requires the principal's prior written consent to transition to transaction brokerage. The presumption does not override that relationship. Limited representation means the buyer or seller is not responsible for the licensee's acts and gives up undivided loyalty. A transaction broker assisting both parties will not represent one to the detriment of the other. Do not add the single agent duties of loyalty, obedience, or full disclosure to the statutory transaction broker list.