Agent Rivera, a Connecticut licensed salesperson, receives a referral fee from an out-of-state mortgage company for referring her buyer client to that company for financing. Rivera does not disclose this arrangement to her client. Under Connecticut law, which of the following best describes the legal issue with Rivera's actions?
Correct Answer
B) Rivera's actions may violate both CGS Chapter 392 and CUTPA by creating an undisclosed conflict of interest that constitutes a deceptive practice
Rivera's undisclosed receipt of a referral fee from a mortgage company while representing a buyer client creates a conflict of interest that she has a fiduciary and statutory duty to disclose. Under CGS Chapter 392, licensees must act in the best interest of their clients and make full disclosure of any material conflicts. Additionally, the Connecticut Unfair Trade Practices Act (CUTPA, CGS § 42-110a et seq.) prohibits deceptive acts and practices in commerce, and failing to disclose a financial arrangement that could influence professional recommendations to a client can constitute a deceptive practice under CUTPA, exposing Rivera to civil liability and license discipline.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
In Wyoming real estate practice, a first-time salesperson applicant completes coursework. What should the licensee remember?
A Wyoming licensee is reviewing an out-of-state salesperson applicant prepares for testing. What is the best answer?
In Wyoming real estate practice, a salesperson applicant age is reviewed. What should the licensee remember?
A responsible broker in Wyoming asks about a nonresident applicant provides home-state evidence. Which answer follows Wyoming law?
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- → Which Wyoming rule applies when an out-of-state salesperson applies for Wyoming licensure?
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- → For the Wyoming salesperson state portion, a first-time Wyoming salesperson applicant starts the application process. Which statement is correct?
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- → For the Wyoming salesperson state portion, a licensee asks how long Wyoming renewal periods are. Which statement is correct?
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