Question 152

The agency relationship terminates automatically upon expiration of the listing.

Once a listing contract expires, the agency relationship between the seller and the listing broker ends automatically, as there are no further obligations from either party without an extension or new agreement.

A) may continue indefinitely if the seller and the broker agree to this orally

This option is incorrect because a listing contract does not continue indefinitely based on an oral agreement. For an agency relationship to persist, a formal extension or renewal of the listing contract must be executed in writing, as oral agreements may not suffice legally.

B) may continue until the broker provides a written notice of termination

This option is incorrect because the agency relationship does not require a written notice of termination to conclude. The relationship automatically ends with the expiration of the listing contract, and no additional action is necessary from the broker.

C) was never legally binding since no licensed activity was performed

This option is incorrect because the listing contract is legally binding until it expires, regardless of whether offers were received. The validity of the contract does not depend on the performance of licensed activities during its term.

D) terminates automatically upon expiration of the listing

This option is correct as it accurately reflects the legal principle that an agency relationship concludes when the listing contract expires. There are no obligations or ongoing agreements unless a new contract is established.

Conclusion

The correct answer, D, is definitive as it aligns with the legal framework governing agency relationships in real estate. Unlike the other options, which propose conditions that either allow continuation or misinterpret the nature of the contract, D clearly states the automatic termination that occurs at expiration, emphasizing the importance of formal agreements in real estate transactions.