Salesperson Aloha works for Broker Sunset Realty in Hawaii. Aloha has a buyer's agency agreement with client Mei. Broker Sunset Realty also has a listing agreement with seller Koa for a property Mei wants to buy. Broker Sunset Realty wants to proceed with designated agency. Which of the following correctly describes a key limitation that applies to the designated agents in this arrangement under Hawaii law?
Correct Answer
A) The designated agents must maintain confidentiality and may not share their respective client's confidential information with each other or with the broker acting as dual agent.
Under Hawaii Administrative Rules Title 16, Chapter 99, in a designated agency arrangement, each designated licensee represents only their assigned client and owes that client fiduciary duties including confidentiality. The designated agents must not share confidential client information with each other or with the supervising broker, who occupies a dual agency role at the brokerage level. This information barrier (sometimes called an 'ethical wall') is essential to the integrity of designated agency and distinguishes it from full dual agency.
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