General agent

Key Takeaways

• A general agent has authority over many of the principal's affairs on a continuing basis, but not over all of them.
• A universal agent is granted power to handle all of the principal's affairs, and a special agent is hired for one narrow task such as selling one house.
• A property manager is the standard example of a general agent, because the authority covers many kinds of decisions and does not end when one deal closes.
• In Washington every property a firm manages must be supported by a written management agreement signed by the owner and the designated broker (WAC 308-124D-215).

What It Means

A general agent is authorized to act for a principal across a range of matters, on a continuing basis, rather than for one errand. Agency authority sits on a scale. A universal agent is granted the power to handle all of the principal's affairs, which can include finances, property purchases, contract negotiations, and advertising deals. A special agent is hired for one narrow job, which is why a broker retained to sell a single house is a special agent. The general agent sits between them, holding authority to represent many of the principal's affairs but not all of them.

Property management is the textbook case, and the three types of agency representation are usually taught around it. An owner who hires a management firm is not handing over one task. That firm advertises vacancies, screens applicants, signs leases, collects rent, holds deposits, orders repairs, and reports back, month after month, inside limits the owner sets in writing. Breadth plus duration is what makes the Agency Relationship general. To classify any relationship, ask two questions: how many kinds of decisions does this person get to make, and does the authority end when a single transaction closes.

How It Works in Washington

Washington layers a licensing framework over the common-law categories, and the rules sit with the Department of Licensing. RCW 18.85.011 defines real estate brokerage services to include performing property management services, which the statute describes as including, with no limitation, marketing, leasing, renting, the physical, administrative, or financial maintenance of real property, or the supervision of such actions. So the classic real estate general agent, the property manager, is performing regulated activity through a licensed firm rather than doing an informal favor for an owner.

WAC 308-124D-215 then sets the paperwork. All properties managed by the firm must be supported by a written management agreement signed by the owner and designated broker and retained, and that Property Management Agreement must state at a minimum the firm's compensation, the type and number of units, whether the firm is authorized to collect and disburse funds and for what purposes, any authorization to hold security deposits and how they may be disbursed, and how often the owner gets summary statements. That written scope is the practical outer edge of the general agent's authority, and the owner's case for hiring one usually turns on it. Sale transactions work differently: RCW 18.86.010 defines an agency relationship as the one created between a real estate firm and a principal, and RCW 18.86.020(1) has the firm appoint an individual broker to represent a buyer or a seller for that transaction.

Example

Maria owns a 12-unit apartment building in Tacoma. She hires Sound Property Management, a licensed real estate firm, and signs a written management agreement with the firm's Designated Broker. The agreement sets the fee at 8 percent of collected rent, authorizes the firm to sign 12-month leases at $1,850 a month or more, to collect rent and deposits into the firm's Trust Account, to approve repairs up to $1,500 without calling her, and to send her a summary statement every month. If all 12 units stay leased at $1,850, the building collects $266,400 over the year and the firm earns $21,312.

That is general agency. The firm makes many kinds of decisions, repeatedly, inside Maria's written limits, and the relationship does not end with any one lease. Two years later Maria decides to sell the building and signs a listing with a different firm. That listing firm is a special agent: one property, one transaction, and the authority ends when the sale closes or the listing expires.

Common Mistakes and Exam Traps

• Universal, general, and special describe how much authority the agent holds, not how skilled the agent is. Universal covers all of the principal's affairs, general covers many but not all, and special covers one task.
• A listing broker is a special agent for that seller, while the same licensee is treated as a general agent of the firm they are affiliated with. One question can use both roles.
• Breadth and duration separate general from special agency, not how long the work takes. A single sale that drags on for six months is still special agency.
• Property management is real estate brokerage services under RCW 18.85.011, so the general agent role in Washington runs through a licensed firm rather than a private side arrangement.