A broker supplies financing for a project with conditions to sell the completed project. What best describes this relationship?

In this scenario, the relationship described is best characterized as "agency coupled with an interest." This term refers to a situation where a broker or agent has a vested interest in the outcome of a transaction, which affects their duty and authority in representing the principal.

When a broker provides financing for a project, they are essentially investing in the success of that project. This financial stake creates a contractual obligation that aligns the broker's incentives with the interests of the project. Since the broker is involved in both financing the project and has conditions attached to the sale of the completed project, this illustrates that the broker's authority to act on behalf of the principal (the project owner) is influenced by their financial interest.

In agency coupled with an interest, the agent's authority does not end simply because the principal may no longer wish to continue the agency relationship. The agent's financial involvement creates a lasting obligation that goes beyond regular agency relationships, where the agency can be revoked without such conditions.

Understanding this concept is essential because it highlights the unique dynamics of responsibilities and rights in real estate transactions, especially when financing is involved. The presence of an interest shifts the traditional perceptions of agency and underscores the agent's role in protecting their investment while fulfilling the obligations to the principal.