Question 12

It is terminated

The agency relationship between the licensee and the owner is terminated when the entire block is condemned under eminent domain. This legal action effectively removes the ability to sell the property as it no longer exists as a viable asset.

A) It is a general agency relationship

A general agency relationship is characterized by a broader scope of authority, which does not apply in this situation. Since the property in question has been condemned, the authority to sell it ceases, making this option incorrect.

B) It is an agency with an interest, allowing the licensee to collect a higher commission for the sale of the owner's house to the city

This option is incorrect because an agency with an interest would imply that the licensee has a vested interest in the property, which is not applicable once the property has been condemned. The agency relationship cannot continue under these circumstances.

C) It remains a special agency, allowing the licensee to handle the search for the next property purchased by the owner

While a special agency allows the licensee to act on behalf of the owner for specific tasks, the condemnation of the property nullifies any ongoing relationship. Thus, this option is also incorrect as the agency cannot persist after the property is no longer available for sale.

D) It is terminated

This option is correct because the condemnation of the entire block means the property is no longer available for sale, effectively terminating the agency relationship. The licensee has no authority or reason to continue representing the owner in this scenario.

Conclusion

The correct answer is that the agency relationship is terminated due to the condemnation of the property under eminent domain. All other options fail to recognize that the fundamental basis for the agency—selling the property—no longer exists, thus invalidating any form of continued agency.