Broker Kim operates a brokerage in Lowell. She designates salesperson Alex to represent seller Paula and salesperson Beth to represent buyer Mike in the same transaction. After the designation, Mike confides to Beth that he is willing to pay $30,000 above the asking price. Under Massachusetts designated agency rules, which of the following correctly describes Beth's and Broker Kim's obligations regarding this information?
Correct Answer
B) Beth must keep Mike's maximum price confidential from both Alex and Broker Kim, as the designated agency structure creates a confidentiality wall
Under 254 CMR 3.00, the purpose of designated agency is to allow both parties to receive full representation within the same brokerage by creating an effective confidentiality wall between the designated agents. Beth, as Mike's designated agent, owes Mike the duty of confidentiality. Mike's maximum price is confidential information that must not be shared with Alex (Paula's designated agent) or with Broker Kim in a way that would allow it to flow to the seller's side. The designated agency structure requires that each designated agent maintain confidentiality as to their client's sensitive information, even from the supervising broker in the context of the transaction.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
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