Under RESA, which of the following is a duty that a licensee owes to ALL parties in a transaction, including unrepresented parties?

Q: What is the correct answer to: Under RESA, which of the following is a duty that a licensee owes to ALL parties in a transaction, including unrepresented parties?

The correct answer is The duty to act honestly and with reasonable care and skill. Option B is correct because under RESA, the duty to act honestly and with reasonable care and skill is owed to ALL parties in a transaction, including unrepresented parties. This baseline duty ensures a minimum standard of professional conduct regardless of the agency relationship. It prevents licensees from misleading or negligently advising anyone involved in the transaction.

Q: What background knowledge is needed for this Agency & Professional Ethics question?

RESA creates a tiered duty structure. The baseline duty owed to ALL parties (including unrepresented buyers or sellers) includes acting honestly, not engaging in misrepresentation, and exercising reasonable care and skill. Higher duties owed specifically to CLIENTS include: undivided loyalty, full disclosure of material information, confidentiality, obedience to lawful instructions, and accounting for all funds. Understanding this tiered structure is essential for determining what a licensee must and must not do when dealing with different parties.

Q: What is a good way to remember the answer to this Agency & Professional Ethics question?

Think of a two-tier pyramid: the BASE (all parties) gets Honesty and Reasonable Care. The TOP (clients only) gets Loyalty, Confidentiality, and Full Disclosure. 'H-R for All, L-C-D for Clients.' When the exam asks about duties to ALL parties or unrepresented parties, the answer is always honesty and reasonable care. If the duty mentioned involves loyalty or confidentiality, it applies only to clients.

Q: What exam tip applies to this Agency & Professional Ethics question?

The word 'ALL parties' in the question is the key signal. Only universally applicable duties like honesty and reasonable care fit. Duties like negotiating the best price, confidentiality, and loyalty are client-specific and cannot be owed to all parties simultaneously.

Q: How does this Agency & Professional Ethics concept apply in real world practice?

A listing agent in Kelowna is showing a property to an unrepresented buyer. While the agent owes full loyalty and confidentiality to the seller (their client), they must still act honestly with the unrepresented buyer — they cannot make false representations about the property's condition and must exercise reasonable care in their dealings.

Question

Agency & Professional EthicsBCEASY

Under RESA, which of the following is a duty that a licensee owes to ALL parties in a transaction, including unrepresented parties?

Answer Options

A

The duty to negotiate the best possible price

B

The duty to act honestly and with reasonable care and skill

C

The duty to keep all information confidential

D

The duty to disclose all known offers