Massachusetts salesperson Greg is representing a seller. During negotiations, Greg learns that the buyer's financing has fallen through but conceals this information from his seller-client, instead encouraging the seller to accept the buyer's offer and grant a 30-day extension, during which time Greg hopes to find alternative financing for the buyer. The deal ultimately collapses and the seller suffers financial losses. The seller files a complaint with the Board. Under Massachusetts law, which of the following most accurately describes the Board's likely findings?
Correct Answer
A) Greg violated his fiduciary duty to the seller by concealing a material fact, which constitutes grounds for disciplinary action under MGL Chapter 112, regardless of his intent to help the buyer secure financing
Greg represented the seller and therefore owed fiduciary duties—including the duty of loyalty and the duty to disclose all material facts—to the seller. The buyer's financing failure is a material fact that the seller needed to know to make an informed decision about whether to grant an extension. By concealing this information and encouraging the seller to grant the extension, Greg breached his fiduciary duty to his own client. Under MGL Chapter 112 and Board regulations, this breach constitutes grounds for disciplinary action, regardless of Greg's subjective intent to help the buyer.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
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.
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