60. A licensee is attempting to sell property under an exclusive agency listing. The entire block where the property is located has been condemned under the right of eminent domain. Which of the following is true of the licensee's agency relationship with the owner?
Answer: D
It is terminated.
When a property is condemned under the right of eminent domain, the agency relationship is effectively terminated because the property is no longer available for sale. The licensee can no longer perform their duties regarding the sale of the property.
A) It is a general agency relationship.
This option is incorrect because a general agency relationship implies a broader scope of authority, typically involving multiple transactions or ongoing business. The condemnation of the property ends any active agency relationship, meaning it cannot be classified as general.
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 also incorrect. An agency with an interest would imply that the licensee has a vested interest in the transaction, which does not apply here since the property has been condemned and the agency relationship has ended. There is no commission to be earned under these circumstances.
C) It remains a special agency, allowing the licensee to handle the search for the next property purchased by the owner.
This option is incorrect as well. A special agency is limited to a specific transaction or task. Since the property has been condemned, the special agency regarding that specific property is terminated, and the licensee cannot continue to act on behalf of the owner in this context.
D) It is terminated.
This is the correct option, as the condemnation of the property effectively nullifies the agency relationship. The licensee can no longer represent the owner in the sale of the property, thus terminating the agency.
Conclusion
The correct answer is definitive because the condemnation of the property under eminent domain results in the termination of the agency relationship. All other options fail to acknowledge the legal implications of the property being condemned, which ends the licensee's authority to act on behalf of the owner.