Texas Real Estate Sales Agent ExamContractsMedium
A property manager enters into a property management agreement with an owner. The agreement specifies that the manager will receive a management fee of 8% of the gross monthly rents collected. Additionally, the manager is authorized to negotiate and sign new leases for a flat fee of $200 per lease and handle minor repairs up to $500 without prior owner approval. What type of agent is this property manager acting as for the owner?
- ASubagent
- BGeneral Agent
- CSpecial Agent
- DUniversal Agent
Show answer & explanationAnswer & explanation
Correct answer: B. General Agent
A general agent has broad authority to act on behalf of a principal within a specific business or range of activities. A property manager, with the authority to collect rents, sign leases, and approve repairs, fits this description.
Why the other options are wrong
- A. A subagent is an agent of an agent, owing fiduciary duties to the principal but appointed by another agent, not directly by the principal.
- C. A special agent has limited authority to act on behalf of a principal for a specific transaction (e.g., a real estate broker listing a property).
- D. A universal agent has full authority to act on behalf of the principal in all matters, which is very rare and requires a power of attorney.
General Agent
An agent authorized to perform a broad range of acts in connection with the principal's business or property, but not all matters. Property managers are typically general agents.
- Broad authority over a specific area
- Ongoing relationship
- Can bind the principal in related matters
Memory trick: General agent has general powers, but not universal ones.