Broker Nina is a transaction broker assisting both buyer Marcus and seller Diana in the purchase of a Pueblo home. After the contract is signed, Marcus privately tells Nina that he has discovered he cannot qualify for the loan amount needed and is considering walking away from the deal. Nina knows Diana has already made moving arrangements based on the pending sale. What must Nina do under Colorado's transaction broker rules?
Correct Answer
A) Nina must keep Marcus's financing concern confidential from Diana but must encourage Marcus to resolve the issue or formally terminate per the contract terms
Under C.R.S. § 12-10-407, a Colorado transaction broker owes a duty of confidentiality to each party regarding information that one party has asked to be kept confidential or that would damage that party's bargaining position. Marcus's private communication about his financing difficulties is confidential information. Nina must maintain this confidentiality while also fulfilling her duty to assist both parties — which means encouraging Marcus to address the financing issue or exercise his contractual rights (such as a loan objection deadline) rather than simply walking away. Nina does not disclose the confidence, but she also does not ignore her duties to facilitate the transaction.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
In real estate, a client is someone to whom the agent owes fiduciary duties through an agency relationship, while a customer is a third party to whom the agent owes only honesty and fair dealing.
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