A listing broker sells an office building to a syndicate of which the broker is a member without informing the seller of this interest. Before closing, the seller discovers the broker’s interest and refuses to sell. What would happen in a civil suit to collect a commission?
Correct Answer
B) No commission would be due.
The broker listed the building for the seller and then sold it to a syndicate in which the broker was a member, without telling the seller. That is a breach of the duty of loyalty and an undisclosed dual interest and secret profit under Business and Professions Code § 10176(d) and (g). An agent who breaches a fiduciary duty in the transaction forfeits the right to compensation from the principal, and here the seller discovered the interest before closing and refused to convey. In a civil suit for the fee, no commission would be due.
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Related Topics & Key Terms
Related Topics:
Key Terms:
Related Concepts
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
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.
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
More Laws Of Agency Fiduciary Duties Questions
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A broker who fails to promptly disclose their dual agency status is subject to:
A broker’s fiduciary obligation to protect a seller’s confidential information continues:
A broker has an exclusive agency listing on a property. If the owner sells the property, the broker is entitled to:
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