The Apparent Authority in Real Estate in the United States

When it comes to business, especially real estate, the authority with which an individual acts can vary. In the scenario presented, we encounter an interesting dilemma involving Derrick, Paul, and Sally.


Derrick is the owner of a real estate firm. He hires Paul to handle all business operations, but clearly states that all business decisions must be discussed with him. Sally, a marketing representative, approaches to offer her services and, upon seeing Paul's tag indicating that he is the office manager, assumes that he has the authority to make business decisions. Without consulting Derrick, Paul decides to acquire Sally's services.

Types of Authority

  1. Express Authority: Refers to authority that is specifically granted through verbal or written instructions.
  2. Implied Authority: It is that authority that an agent is supposed to have to perform acts that are reasonably necessary.
  3. Actual Authority: It is the real power granted to an agent by the principal.
  4. Apparent Authority: Refers to authority that, although not expressly granted, is perceived to have been granted due to the actions or behavior of the principal.

The verdict

In this situation, even though Derrick gave Paul no actual authority to make business decisions without consulting him, Sally assumed that Paul had such authority based on his office manager title. Therefore, what prevails here is the “Apparent Authority” (Apparent Authority).


It is vital that companies clearly define and communicate the responsibilities and limits of authority of their employees. This will avoid confusion and possible conflicts in the future. In this case, the lack of clarity led to a situation where apparent authority prevailed.

Legal and Tax Disclaimer

Please be advised that the content presented in this blog is for informational purposes only and should not be construed as legal or tax advice. The articles and information provided here are written from the perspective of a real estate agent affiliated with Keller Williams, and do not represent legal or tax counsel.

As the author, I am a licensed real estate professional under Keller Williams, holding Brokerage DRE License Number: #02197031. However, it is important to note that my expertise is in the field of real estate, and not in legal or tax matters. The insights and opinions shared on this blog are based on my experiences and knowledge in the real estate industry and should be treated as general guidance rather than definitive legal or tax advice.

For specific legal or tax concerns relating to any real estate transactions or investments, readers are strongly encouraged to consult with a qualified attorney or tax advisor who can provide tailored advice based on your individual circumstances and the latest legal and regulatory requirements.

The information on this blog is provided "as is" without warranty of any kind, and I, along with Keller Williams and its affiliates, disclaim all liability for any loss, damage, or misunderstanding arising from reliance on the information contained herein.

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