What is required for a licensee to lawfully represent a client in a transaction?

To lawfully represent a client in a transaction, a licensee must have a valid agency agreement outlining the scope of representation. This written agreement is essential as it clearly defines the roles, responsibilities, and expectations of both the agent (the licensee) and the client. It establishes a legal framework within which the representation occurs, ensuring that all parties are aware of their rights and obligations.

A valid agency agreement also provides critical details regarding the level of service to be provided, the duration of the agreement, and any specific terms that may affect the transaction. This is vital because it protects both the client’s interests and the licensee's practice within the legal and ethical parameters set forth by the Indiana Real Estate Commission. Such documentation mitigates potential disputes and clarifies the fiduciary responsibilities the licensee has toward the client.

In contrast, a verbal agreement lacks the enforceability and clarity that a written contract provides, and no documentation or a prior relationship alone does not create a legal obligation to represent a client in a real estate transaction. Therefore, having a valid agency agreement is the most appropriate and legally sound requirement for representation in this context.