General Agency
A relationship where an agent is authorized to perform a broad, ongoing range of transactions associated with a specific business or operation.
Exam Context & Texas Nuance
General Agency
General agency provides the agent with broader authority than a special agency. The agent has the power to sign contracts and bind the principal within the scope of their designated ongoing business relationship.
Texas-Specific Nuance & Citation
In Texas real estate, there are two primary examples of general agency:
- The relationship between a sponsoring broker and their sponsored sales agents (established via an independent contractor agreement).
- The relationship between a property owner and a property manager (established via a property management agreement).
The Trap
Candidates frequently confuse general agency with special agency. A standard residential listing agreement or buyer representation agreement establishes Special Agency, where the agent has no authority to bind the client. A property management agreement establishes General Agency, where the agent can bind the client.
Worked Example
A property manager in Houston signs an ongoing lease agreement with a tenant on behalf of an out-of-state property owner. Because the property manager has a General Agency relationship with the owner, they have the legal authority to sign this binding lease on the owner’s behalf.