Fiduciary duties are the cornerstone of the agency relationship. They include Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care (OLD CAR). Breach of fiduciary duty can result in license revocation and legal liability.
A listing agent learns from a neighbor that the property sits on a former landfill. The duty of disclosure requires the agent to inform the seller of this material fact, and the seller must then disclose it to potential buyers.
Memorize OLD CAR: Obedience (follow lawful instructions), Loyalty (client first), Disclosure (material facts), Confidentiality (protect private info), Accounting (handle money properly), Reasonable care (act competently). This appears on EVERY exam.
Related Terms
Related Concepts
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
Frequently Asked Questions
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