A Connecticut real estate broker, Diane, is approached by a developer who offers to pay her a referral fee if she steers buyers away from a competing development and toward the developer's project. Diane accepts and begins advising buyers that the competing development has structural problems, which is false. Which of the following correctly identifies all of the legal violations Diane has committed under Connecticut law?
Correct Answer
B) Diane has violated CGS § 20-320 (license law misrepresentation), the Connecticut Unfair Trade Practices Act (CUTPA), and her fiduciary duty to buyer clients.
Diane's conduct implicates multiple overlapping bodies of Connecticut law. First, making false statements about a competitor's property constitutes a material misrepresentation under CGS § 20-320, subjecting her to CREC disciplinary action including license suspension or revocation. Second, steering buyers based on false information and accepting undisclosed referral fees constitutes an unfair and deceptive act under CUTPA (CGS § 42-110a et seq.), which can result in civil liability including punitive damages and attorney's fees. Third, advising buyers based on undisclosed financial incentives rather than their interests constitutes a breach of her fiduciary duty to buyer clients. All three violations apply simultaneously.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Brokers in Florida have strict responsibilities for managing escrow accounts, including monthly reconciliation and proper handling of trust funds.
FREC has the authority to impose fines and other disciplinary actions on licensees who violate real estate laws and rules.
A group boycott is an illegal antitrust practice in which two or more competing real estate businesses agree to refuse to work with a specific person, company, or entity in order to harm that party's ability to compete.
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