Become a Home Based Travel Agent

“Professional Luxury Leisure Consultant” or “Travel Agent”?
By Tom Ogg

An interesting conversation that evolved during the “Think Tank” at the recent Travel Weekly Home Based Travel Agent Show and Conference encompassed the way that sellers of travel identify themselves. The gentleman that introduced the conversation felt that he and his coleauges believed it was almost an insult that they were referred to as mere travel agents. Since he apparently sold ultra luxury travel, something like “Professional Leisure Consultant” or “Professional Luxury Leisure Consultant” might be more appropriate.

What if you were shopping for a new home and sought the advice of a “Professional Luxury Domicile Consultant”. The professional consultant helped you find a home and also helped you buy it. Only after you moved into the house you found out that the house had substantial undisclosed problems that the Consultant (obviously an expert on homes) should have known and advised you about.

Then, you find out that the “Professional Luxury Domicile Consultant” was really a Real Estate Agent that was actually working for the seller of the home that you purchased. Would you sue the agent? Sure you would. Actually, you would sue the agent for failing to disclose their agency (a legal term) relationship and for Breach of Fiduciary (another legal term).

By presenting his or herself as an expert consultant, you would have rightfully thought that he or she was working for you (agency relationship) and had a standard of care (fiduciary responsibility) to make sure that you purchased a good home. Agency law has become so evolved in the real estate market that there are now “Buyer’s Agents” and “Seller’s Agents”. Here is what you should know about your business and agency law. First, here are some legal definitions;

Agency: A consensual relationship created by contract or by law where one party, the principal, grants authority for another party, the agent, to act on behalf of and under the control of the principal to deal with a third party. An agency relationship is fiduciary in nature and the actions and words of an agent exchanged with a third party bind the principal.

Agent: a person who is authorized to act for another (the agent's principal) through employment, by contract or apparent authority. The importance is that the agent can bind the principal by contract or create liability if he/she causes injury while in the scope of the agency.

Fiduciary: An individual in whom another has placed the utmost trust and confidence to manage and / or protect property or money. The relationship is wherein one person has an obligation to act for another's benefit. A fiduciary relationship encompasses the idea of faith and confidence and is generally established only when the confidence given by one person is actually accepted by the other person. Mere respect for another individual's judgment or general trust in his or her character is ordinarily insufficient for the creation of a fiduciary relationship. The duties of a fiduciary include loyalty and reasonable care of the actions or assets within custody. All of the fiduciary's actions are performed for the advantage of the beneficiary.

Agency Disclosure: A statement an agent provides a party to a transaction detailing the nature of the agent’s prospective relationship with that party. The agency disclosure outlines the rights and responsibilities the agent has in a transaction. In general, the agency disclosure states whether the agent will identify the principle in the transaction whom the agent shares a fiduciary relationship.

Travel Agents and Agency Disclosure: Every travel agent should provide his or her clients with a written agency disclosure on every transaction. Generally, travel agents are the agents for the suppliers and have a fiduciary obligation to them. They only have the obligation to be fair and honest to his or her clients who purchase travel products and services from the travel agent.

It is vitally important that the client understand that you are an agent and also with whom you have a fiduciary relationship. If the client believes that you are their agent working on their behalf, then they will also believe that you have a fiduciary obligation to them. Why is this important? Because, if the client believes that you are their fiduciary, you will be held to a much higher standard of care than if they understand that you are the fiduciary of the supplier.

Concealing that you are an agent by using a title such as “Professional Luxury Leisure Consultant” or some such non-disclosing designation is the first step towards inviting a Breach of Fiduciary lawsuit from your client who can claim that you tried to defraud them by failing to disclose your agency relationship. This happens when the client is somehow damaged by a vacation, cruise or trip that you have sold them. The first thing that an attorney will do is establish the client’s basis for a claim against a travel agent. Unless you have an Agency Disclosure Notice signed by the client, you run the risk of facing a Breach of Fiduciary claim.

In many states if a complaint of Breach of Fiduciary is filed the penalty may include the actual damages incurred by the client, but also punitive damages if malice or fraud is proven during the hearing. Punitive damages generally mean treble damages in most states. I urge you to research and understand the basics of agency law and how it can affect you in a lawsuit. Many real estate schools offer classes in agency law and I would suggest that you take one or more to thoroughly protect your business regarding lawsuits.