Broker James represents seller Chen in the listing of a home in Aurora. Buyer Priya is represented by her own buyer's agent, broker Kim. During a showing, James overhears Priya tell Kim that she will pay up to $30,000 above the listing price if necessary. James does not represent Priya in any capacity. What is James's obligation regarding this information under Colorado agency law?
Correct Answer
A) James must disclose Priya's maximum price to Chen, as James owes fiduciary duties to the seller and this information is material to Chen's interests
James is Chen's single agent and owes full fiduciary duties to the seller, including the duty of loyalty and the duty to disclose all information material to the seller's interests. Priya's willingness to pay up to $30,000 above the listing price is clearly material information that could benefit Chen in negotiations. As Chen's agent, James has an affirmative duty to disclose this information to his client. The fact that it was overheard accidentally does not eliminate the fiduciary duty.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
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.
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