What is the primary duty that a real estate agent owes to their client under agency law?
Correct Answer
B) Fiduciary duty
A fiduciary duty is the highest standard of care and loyalty that an agent owes to their client, requiring the agent to act in the client's best interests above their own. This duty encompasses loyalty, confidentiality, disclosure, obedience to lawful instructions, and reasonable care and skill.
Why This Is the Correct Answer
Fiduciary duty is the correct answer because it represents the highest standard of care in agency law. Under Canadian real estate legislation like TRESA and RESA, agents owe their clients a fiduciary duty that encompasses loyalty, confidentiality, disclosure, obedience to lawful instructions, and reasonable care. This duty requires agents to act in their client's best interests above their own, creating a relationship of trust and confidence that is legally enforceable and forms the foundation of the agent-client relationship.
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More Agency & Professional Ethics Questions
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- → Which of the following best describes the duty of confidentiality owed by a real estate agent?
- → What information must an agent disclose to a buyer client about a property's condition?
- → A real estate agent discovers that a property they are showing has a known foundation issue that the seller has not disclosed. What should the agent do?
- → In a complex commercial transaction, a real estate professional discovers information that creates competing duties between their fiduciary obligation to their client and their duty to disclose material facts to other parties. How should this conflict be resolved?
- → An agent representing a buyer learns confidential information about the seller's motivation to sell quickly due to financial hardship. How should this information be handled?
- → A buyer's agent learns that their client has been pre-approved for a mortgage up to $500,000, but the client instructs them to only look at properties under $400,000. What should the agent do with this information?
- → A listing agent learns that the home was once used as a marijuana grow operation and has since been fully remediated. The seller's lawyer confirms the seller has no legal obligation to disclose this, and the seller does not want it disclosed. What should the listing agent do?
- → An Ontario salesperson represents a seller who receives two identical offers, one of them from the salesperson's spouse. The seller does not know about the relationship. What does the Code of Ethics require if the salesperson is to keep acting for the seller?
- → What is 'designated agency' in the context of Alberta real estate?
- → A buyer tells their Ontario salesperson that the seller is facing foreclosure and must sell quickly. How should the salesperson handle this information?
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