A property manager decides to rent a vacant unit in the building she manages to her own family member at below-market rent without informing the property owner. What agency violation has the manager committed?
Correct Answer
A) A breach of loyalty and disclosure: a hidden conflict for personal benefit
Two duties break at once. Letting the unit at below-market rent to her own relative puts her interest ahead of the owner, which is disloyalty, and doing it without telling the owner is the failure to disclose that made it possible. Other choices: authority to select tenants is authority to choose among applicants for the owner, not to choose for herself; calling it a violation of obedience only misses that no instruction was disobeyed, the conflict is the problem; and the relative passing the screening process does not cure a conflict, because the objection is to the hidden benefit rather than to the tenant.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
In real estate, a client is someone to whom the agent owes fiduciary duties through an agency relationship, while a customer is a third party to whom the agent owes only honesty and fair dealing.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
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