Broker Diana operates her own independent brokerage in New Jersey. She lists a property for seller Mrs. Kim and later signs a buyer representation agreement with Mr. Lopez, who wants to buy Mrs. Kim's property. Diana discloses the dual agency situation in writing to both parties. Mrs. Kim asks Diana whether Mr. Lopez has a minimum price below which he would not purchase. Diana knows this information from her conversations with Mr. Lopez. What is Diana's correct course of action?
Correct Answer
C) Diana must refuse to disclose Mr. Lopez's confidential negotiating information to Mrs. Kim, even in a dual agency relationship
Even in a disclosed dual agency relationship, a dual agent in New Jersey retains certain duties to each party. One of the most important limitations of dual agency is that the agent must not disclose one party's confidential negotiating information — such as a buyer's minimum acceptable price or a seller's minimum acceptable offer — to the other party. This confidentiality obligation survives even when both parties have consented to dual agency. Disclosing Mr. Lopez's negotiating floor to Mrs. Kim would harm Mr. Lopez and breach the core protection dual agency consent is meant to preserve.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
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