Broker Kevin is acting as a dual agent for both buyer Chen and seller Martinez in a Lakewood transaction. Both parties signed the required written consent forms. During the transaction, Martinez tells Kevin that he is desperate to sell because he is facing foreclosure and will accept any offer above $350,000. Chen has not made an offer yet. What is Kevin's correct course of action regarding this information?
Correct Answer
A) Keep Martinez's financial motivation confidential and not use it to benefit Chen's negotiation
Under Colorado's dual agency rules (C.R.S. § 12-10-401 et seq.), a dual agent must maintain the confidentiality of each party's personal and financial motivations. Martinez's financial desperation and minimum acceptable price are confidential information that Kevin may not disclose to Chen or use to benefit Chen's negotiating position. This is one of the core limitations of dual agency — the broker cannot use one party's confidential information to advantage the other.
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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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