Fiduciary Responsibilities

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Obedience-Loyalty-Disclosure- Confidentiality- Accountability- Reasonable Care

Confidentiality

The agent is bound to keep any personal information which the client discloses to him confidential, for example, that the client is getting a divorce and must sell quickly. Even if the agency relationship is terminated, the fiduciary duty of confidentiality is never terminated. Example of breach: If a seller client confides to you that he is desperate to sell because of divorce and being transferred, you would breach that confidence by sharing it with anyone. Exceptions to confidentiality An agent can disclose confidential information if required by: * court order * knowledge of client's intent to commit a crime *client authorizes disclosure *defense of a lawsuit- if client sues and it is necessary to disclose information to defend that lawsuit

Disclosure

The agent must disclose any relevant information to the client . Example of breach: If a buyer says to his agent that she is only offering $130,000 but will go to $135,00, the agent would be breaching his responsibility If he disclosed that information to the seller.

Reasonable Care

The broker is always mindful of the principles interest and concerns, for example acting to secure the highest possible price for his client's property. Example of breach: As a seller's agent you fail to ask a buyer's mortgage ability and accept an offer contingent upon obtaining a mortgage. Or, as a buyer's agent you fail to look into the mortgage ability of a home for the offered price. The broker must notify the principal within a reasonable period of time of any information he may receive concerning his property or interests. For example, a client tells a broker that he wants to sell his house for $40,000 . The broker knows the house is really worth $60,000 , but does not inform the client . The real estate business is a service industry, and emphasis should be on service to the client and to the public.

Loyalty

The broker is faithful to his principal and works for no other interested party without the principal's knowledge or permission . For example, Broker Jones has listed Smith's property Broker Jones accepts this offer this offer without the informed consent of Smith, he is in violation of the fiduciary relationship. Example of breach: If your seller client set a price below market value and you brought it at that price rather than advising him to raise the price you would be disloyal.

Accountability

The broker is strictly accountable for any of the principal's assets coming into his hands and must take care to handle them responsibly . For example, using a client's deposit for personal needs would be a violation. Commingling these funds with the broker's personal or business funds is illegal. Conversion is the practice of using commingled funds as the brokers own money. Example of breach: You receive a deposit from a client with a purchase offer. Rather than put it into an escrow account , you commingle it with the general operating funds of your real estate agency.

Obedience

The broker obeys all the legitimate instructions of the principal, for example he may show the property. Example of breach: if your seller client asked for no open house, you would breach that duty if you went ahead and advertised for a open house.

Duties Owed to the Customer

The duties owed to the customer, the person your do not represent , by the agent are those of honesty & truthfulness