Property Management

A Hawaii property manager executes a lease on behalf of the owner for 3 years. The manager later learns they exceeded their authority under the management agreement, which only permitted 1-year leases. The lease is:

AA. Automatically void because the manager exceeded authority
BB. Potentially voidable by the owner, but if the tenant relied in good faith, the owner may be bound under apparent authority✓ Correct
CC. Always enforceable regardless of management agreement terms
DD. Only valid if the manager was a licensed broker

Explanation

If the tenant reasonably relied on apparent authority of the manager, the owner may be bound. However, the owner has remedies against the manager for exceeding their actual authority.

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