New Jersey broker-salesperson Hana is representing buyer couple the Lees. The Lees find a property listed by Hana's own supervising broker. The supervising broker informs Hana that he will act as the dual agent and that Hana will be the Lees' designated agent. The Lees have signed a written designated agency consent. Hana later learns from the supervising broker that the seller is going through a divorce and is under pressure to sell quickly. Under New Jersey designated agency rules, what should Hana do with this information?
Correct Answer
B) Keep the information confidential from the Lees because it was shared by the broker in his capacity as the seller's agent, and designated agency information barriers apply
This is a nuanced designated agency situation. In New Jersey's designated agency framework, the supervising broker acting as dual agent is subject to information barrier obligations. When the broker shared the seller's confidential information (the divorce and financial pressure) with Hana, he did so in his capacity as the seller's agent. The information barrier that is a core feature of designated agency is designed to prevent exactly this kind of cross-contamination of confidential client information. Hana should recognize that this information is the seller's confidential information that came through the dual-agent broker, and she should not disclose it to the Lees. Disclosing it would breach the seller's confidentiality rights and undermine the integrity of the designated agency structure. Hana should instead advise the Lees to conduct their own due diligence and make competitive offers based on market conditions.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
The legal obligation to reveal information that could affect a party's decision to enter into or the terms of a real estate transaction.
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