Broker-associate Jennifer in Arkansas is working under Designated Broker Tom at Summit Realty. Jennifer represents a seller in a transaction where another agent at Summit Realty, Agent Paul, represents the buyer. Tom designates Jennifer and Paul as designated agents for their respective clients. Which statement best describes the agency disclosure obligation in this designated agency arrangement?
Correct Answer
A) Tom must disclose to both the seller and the buyer that designated agency exists and obtain their consent
Under Arkansas agency law, when a brokerage uses designated agency—where different licensees within the same firm represent the buyer and seller respectively—the designated broker must disclose this arrangement to both parties and obtain their consent. This disclosure allows each party to understand that while their individual agent represents only them, the brokerage itself has a relationship with both sides of the transaction.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created by a clear, explicit agreement between the principal and agent, either orally or in writing.
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
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