Understanding Florida's Transaction Broker Role

ORLANDO, Fla. — Florida law states that unless a residential real estate broker provides a single agent or no brokerage relationship disclosure to their customer, the broker is presumed to be a transaction broker. But what does that mean?

Transaction broker is defined in Section 475.01(1)(l), Florida Statutes. A transaction broker can represent a seller, a buyer or both in a real estate transaction but does not represent either in a fiduciary capacity. Accordingly, the seller and the buyer give up their rights to undivided loyalty from the licensee. The limited representation allows the licensee to facilitate the transaction, but the licensee cannot work to the detriment of one party over the other if representing both.

Section 475.278(2), Florida Statutes, sets forth the duties of a transaction broker. A transaction broker must deal honestly and fairly, account for all funds, use skill, care, and diligence and disclose latent defects. In addition, a transaction broker must present all offers and counteroffers in a timely manner, unless their customer has instructed otherwise in writing. 

Finally, a transaction broker has the duty of limited confidentiality. The limits in the statute include disclosing that a party will pay more or accept less than presented in the listing or offers, a party’s motivation, private details of financing and anything else the customer asks the broker to keep confidential.

When reviewing these duties, it’s important to note that some of them, such as the duty of dealing honestly and fairly and the duty of disclosing latent defects, are universal to all three of Florida’s brokerage relationships. Where a transaction broker differs from, for example, a single agent, is that the transaction broker doesn’t have a duty of loyalty and only a limited duty of confidentiality.

Some brokers ask, “I’m a transaction broker. Doesn’t that mean I represent the transaction?” As you can see from the statutory definition and duties, that answer is no.  A transaction broker represents either or both of the parties, but the broker does not represent the transaction. If the broker is representing both parties, the broker facilitates the transaction but does not represent it.

Though the nuances of transaction broker practice can be tricky, ultimately it provides a great deal of flexibility to a real estate broker. If the broker identifies a buyer, the broker can represent that buyer in the same transaction without additional disclosure paperwork. Transaction brokers should be mindful of complying with Article 7 of the National Association of Realtors®’ Code of Ethics, which requires disclosure and consent if the broker is receiving compensation from more than one party. But the representation of both parties in a transaction is presumed to be permitted as a transaction broker.

Finally, one word of caution: When representing themselves in a transaction, a broker cannot be a transaction broker. Almost by definition, a person will always have their own best interests at heart when buying or selling their own property. The presumption of being a transaction broker should not mislead a broker into forming a relationship with the other party and its inherent conflicts of interest.

Richard Swank is an Associate General Counsel for Florida Realtors.

Note: Information deemed accurate on date of publication.

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