Real Estate Council of Alberta Fundamentals Practice Exam

Which type of agency relationship does Designated Agency pertain to?

1. Brokerage-wide representation

2. Relationship with the brokerage

3. Relationship with an individual agent

4. Relationship with the client

The correct answer is: Relationship with an individual agent

Designated Agency refers specifically to a relationship between a client and an individual agent within a brokerage. In this arrangement, the brokerage assigns a specific agent to represent the client in a transaction, ensuring that the client receives focused and personalized service. This setup allows the individual agent to act on behalf of the client while maintaining the overall brokerage's role in the transaction. In a designated agency situation, the agent is responsible for the fiduciary duties owed to the client, such as loyalty, disclosure, and confidentiality. This individual representation helps to avoid potential conflicts of interest within the brokerage when multiple agents are working with different clients. The brokerage as a whole serves as a resource and support system, but the direct relationship regarding representation is strictly between the client and the designated agent. Understanding this distinction is crucial in real estate practice, as it helps ensure that clients' interests are prioritized through dedicated representation, aligning with ethical guidelines and regulatory requirements.