National Real Estate Exam (PSI)General Principles of AgencyEasy
A property owner is going abroad for two years and grants a trusted friend broad power of attorney to manage all of the owner's business affairs, including buying, selling, and leasing real estate. What type of agency has been created?
- AGeneral agent
- BUniversal agent
- CSubagent
- DSpecial agent
Show answer & explanationAnswer & explanation
Correct answer: B. Universal agent
A universal agent has broad authority to act on behalf of the principal in all matters, which matches the scope of a full power of attorney over business affairs. A special agent handles only one specific transaction, and a general agent handles a range of matters but not everything.
Why the other options are wrong
- A. A general agent has ongoing authority but usually limited to a particular business or category of activity.
- C. A subagent works for the agent, not directly for the principal, and is unrelated to scope of authority here.
- D. A special agent is limited to one specific transaction, not all affairs.
Universal Agent
An agent given unlimited authority to act on the principal's behalf in all matters, personal and business.
- Broadest type of agency authority
- Often created by comprehensive power of attorney
- Contrasts with special (one task) and general (specific business) agents
Memory trick: Universal = Unlimited