Pennsylvania Agency Law Guide for the Real Estate Exam
Master Pennsylvania agency relationships, consumer notice requirements, and broker duties for the PREC salesperson exam under RELRA.
Agency Law in Pennsylvania: Two Layers to Study
Agency law questions appear in both the national and state sections of the Pennsylvania salesperson exam. The national section tests universal principles: fiduciary duties, types of agency, creation and termination, disclosure. The state section tests how Pennsylvania implements agency law specifically — including the Consumer Notice requirement under RELRA.
Budget time for both layers. Candidates who know only the national principles often miss the Pennsylvania-specific questions.
Universal Agency Principles (National Section)
Agency defined: An agent acts on behalf of a principal. In real estate, the broker (and their salesperson) is the agent; the buyer or seller is the principal.
Fiduciary duties — OLDCAR:
- Obedience — follow the principal's lawful instructions
- Loyalty — place the principal's interests above all others, including your own
- Disclosure — reveal all known material facts affecting the transaction
- Confidentiality — protect confidential information even after the agency ends
- Accountability — account for all funds held on behalf of the client
- Reasonable care — exercise professional skill and diligence
Types of agency:
- Seller's agency — listing broker and affiliated salespersons represent the seller
- Buyer's agency — broker represents the buyer's interests exclusively
- Dual agency — one broker (or one firm) represents both buyer and seller in the same transaction; requires informed written consent from both parties
- Designated agency — different salespersons within the same brokerage represent buyer and seller separately; allowed in Pennsylvania
Sub-agency: A salesperson is legally an agent of the broker, and the broker is the agent of the client. Salespersons cannot hold their own agency — they act through their employing broker.
Pennsylvania-Specific: Consumer Notice
Pennsylvania requires brokers and salespersons to provide a Consumer Notice to buyers and sellers at the time of first contact. This is one of the most-tested Pennsylvania agency topics.
What is the Consumer Notice?
The Consumer Notice is a standardized form approved by PREC that explains the types of agency relationships available in Pennsylvania (seller's agent, buyer's agent, dual agent, transaction licensee). It notifies consumers of their options before they engage with a licensee.
When must it be given?
At the time of or prior to the first substantive discussion about real estate. In practice, it is given at first meaningful contact — before showing properties, before discussing price, and before signing any agreement.
Important: The Consumer Notice is not an agency agreement. It does not create a representation relationship — it only discloses the options. A separate written representation agreement creates actual agency.
Consequences of failure to provide: Failing to give the Consumer Notice is a RELRA violation subject to PREC discipline, including fines and license suspension.
Transaction Licensee
Pennsylvania recognizes a "transaction licensee" role — a licensee who provides services to a buyer or seller without establishing a fiduciary relationship. Transaction licensees owe honesty, accounting for funds, and reasonable care — but not the full fiduciary duties of loyalty and confidentiality.
This is a Pennsylvania-specific concept that appears on the state section. Know the distinction: a transaction licensee is not an agent and does not represent either party.
Dual Agency in Pennsylvania
Dual agency requires informed written consent from both buyer and seller. The dual agent owes fairness and honesty to both parties but cannot share confidential pricing information or negotiating motivations with the other party.
Exam scenarios: A dual agent should not tell the buyer that the seller has already received no offers and is highly motivated — that is confidential information. A dual agent should not tell the seller that the buyer is pre-approved for more than their offer — also confidential.
Supervision and Responsibility
Under RELRA, a broker is responsible for all real estate activities conducted by their salespersons and associate brokers. This is called vicarious liability. A broker can be disciplined for the acts of their licensees even if the broker had no direct knowledge of the violation — if they failed to properly supervise.
Salespersons must work under a licensed Pennsylvania broker and may not operate independently.
For full Pennsylvania agency law prep and practice questions, visit [CARealestate.com/states/pennsylvania](https://carealestate.com/states/pennsylvania).
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