OLDCAR: Fiduciary Duties
~12 min read · Apply obedience, loyalty, disclosure, confidentiality, accounting and reasonable care.
Six fiduciary duties define the client relationship, and the exam's mnemonic is OLD CAR: Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable care. Learn each duty's edge cases — the illegal instruction, the secret that outlives the agency, the material fact that must be told.
OLD CAR unpacked
Obedience: follow all LAWFUL instructions — an order to hide a defect or discriminate is refused, not obeyed. Loyalty: the client's interest above everyone's, including the agent's own — no secret profits, no self-dealing without full disclosure. Disclosure: tell the client every material fact bearing on the transaction — other offers, the buyer's finances, the true market picture, relationships between parties. Confidentiality: protect the client's secrets (motivation, bottom line, deadlines) — a duty that survives the agency's end. Accounting: track and safeguard all money and property; no commingling with personal funds, no conversion. Reasonable care: competence and diligence — and knowing when to refer the client to lawyers, inspectors, and tax professionals.
- Obedience stops at illegality
- Loyalty bars secret profits and self-dealing
- Disclosure to the CLIENT is total (material facts)
- Confidentiality survives closing — forever
- Accounting: client funds separated, documented
- Reasonable care includes referring beyond your expertise
Client vs customer
Fiduciary duties run to the client (principal). The customer — the unrepresented other side — is owed honesty and fair dealing: no misrepresentation, disclosure of known material property defects, and accurate answers, but no advice, no advocacy, no confidentiality. The line item the exam loves: an agent must disclose a leaking foundation to ANY buyer (material fact about the property) but must never disclose the seller's divorce deadline to anyone (client confidence).
Breach and its price
Breach consequences stack: loss of commission (a disloyal agent forfeits compensation), rescission of affected transactions, damages, license discipline, and for money violations, criminal exposure. Classic breach patterns: net-listing-style secret profits, buying the client's listing through a straw without disclosure, revealing the bottom line to induce a fast deal, and 'forgetting' to present a low offer — ALL offers are presented unless the client instructs otherwise in writing.
Worked example
A seller's agent learns his client must sell within 30 days (job transfer) and would take $60,000 under list. A buyer's agent calls asking 'any flexibility?' Meanwhile the agent's brother wants to buy the house through an LLC, and a $380,000 offer arrives that the agent considers 'insultingly low' with a $410,000 offer pending. Apply OLD CAR to each fork.
The flexibility question: confidentiality — motivation and bottom line are client secrets; the compliant answer markets the property without revealing distress ('the seller will review all offers'). The brother's LLC: loyalty + disclosure — self-dealing one step removed; the agent must disclose the relationship fully and the client must consent in writing, or the agent steps away; a concealed related-party purchase forfeits commission and invites rescission. The 'insulting' offer: obedience + disclosure — ALL offers are presented promptly; the agent's opinion never filters the client's decision, and with two offers, presenting both together with honest counsel serves loyalty. The 30-day deadline itself: disclosed to no outsider, ever — even after the listing expires.
Common exam pitfalls
Obeying an unlawful instruction.
'Don't show it to those people' or 'hide the water damage' is refused and, if pressed, the agency is ended — obedience covers lawful instructions only.
Treating confidentiality as expiring with the listing.
Client confidences survive termination indefinitely — next year's negotiation may not use last year's secrets.
Screening offers by the agent's judgment.
Every offer is presented unless the client has directed otherwise in writing — 'too low to bother' is a breach.
OLD CAR: Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable care — drive it for the client, honestly past the customer.
Recap
- Six duties to the client: OLD CAR
- Customers get honesty and material-defect disclosure, not advocacy
- Property defects disclosed to all; client secrets to none
- Confidentiality survives the agency
- All offers presented; no secret profits; funds never commingled
- Breach: lost commission, rescission, damages, discipline
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