Agency
What is 'apparent authority' in Pennsylvania real estate agency and how can it create liability for a principal?
AAuthority that is obvious from the agent's license and professional appearance
BAuthority created when a principal's words or actions lead a third party to reasonably believe the agent has authority to act, even if actual authority was not granted✓ Correct
CThe publicly apparent scope of a licensee's activities as posted on the PREC website
DAn agent's authority that is apparent in the written agency agreement
Explanation
Apparent authority (also called ostensible authority) exists when a principal's conduct causes a third party to reasonably believe that an agent has authority to act. For example, if a seller allows a licensee to negotiate prices and terms with buyers, the seller may be bound by the licensee's representations even if no explicit authority was granted. Pennsylvania principals can be held liable for their agents' acts within the scope of apparent authority — making it essential to clearly define and communicate the agent's scope of authority.
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