A New Jersey buyer's agent, salesperson Torres, is representing buyer Chen in the purchase of a home. The listing broker's firm offers compensation to cooperating buyer's agents through the MLS. Torres's broker accepts this compensation from the listing broker. Which of the following best describes the effect of this compensation arrangement on Torres's agency duties to buyer Chen under New Jersey law?
Correct Answer
B) Torres's fiduciary duties to Chen are not affected; a buyer's agent may receive compensation from the listing side without changing the agency relationship
Under New Jersey agency law, the source of a buyer's agent's compensation does not determine or change the agency relationship. A buyer's agent may receive compensation that originates from the seller's side (through the listing broker's offer of cooperation) without becoming a dual agent or subagent. What matters is the agency agreement between Torres and Chen, not who ultimately funds the compensation. Torres's fiduciary duties to Chen remain intact. New Jersey regulations recognize that compensation arrangements are separate from agency relationships.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
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.
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