the Month - April, 2021
Scope of Agency Authority
Source: Property Management & Managing Risk
By: Robert C. Kyle & Floyd M. Baird, RPA/SMA
An Agent is either a general agent or a special
agent, depending on the scope of the agent’s
authority. A general agent can act on behalf of
the principal on a range of matters and can obligate the
principal to any contracts signed by the agent that are within
the scope of the agent’s duties. On the other hand, a special
agent is only authorized to represent the principal on a
specific matter or transaction. Once that transaction is
concluded, the agency is terminated. A special agent
has no authority to sign any contracts on behalf of the
principal. A property manager is usually a general
agent, because of the variety of tasks to be
Fiduciary Duties: An agent, whether
specific or general, has certain duties that are imposed by
agency law. This is because an agent has a fiduciary
relationship with his or her principal. A fiduciary
relationship is a confidential relationship that requires the
highest degree of loyalty on the part of the agent.
Implicit in this fiduciary relationship are other duties as
Loyalty: the property manager must always
put the property owner’s interest first, above his or her own
the property manager must exercise a reasonable degree of
skill while managing the property.
the property manager must carry out the property owner’s
instructions. (If an owner demands that the property manager
do something illegal or unethical, immediately terminate the
the property manager must accurately report on the status of
all funds received on behalf of or from the owner. Do not
commingle funds. Commingling involves combining the owner’s
funds with the property manager’s business or personal funds.
the property manager must keep the owner fully informed of all
material facts regarding the management of the property.
If the property manager is careless in carrying out his or her
duties, the property manager could be found negligent and be
liable to the property owner for any damages.
web page was updated on 03/29/2021.