Nevada broker Sandra has two salespersons, Paul and Wendy, in her office. Paul represents seller Mr. Kim, and Wendy represents buyer Ms. Torres in the same transaction. Sandra obtains written consent from both parties for limited dual agency and designates Paul and Wendy as designated agents. After designation, Ms. Torres tells Wendy that she would go up to $520,000 for the property but is offering $490,000. Mr. Kim later tells Paul he would accept $500,000. Which of the following statements is correct under Nevada law?
Correct Answer
C) Both Paul and Wendy must keep their respective clients' confidential pricing information from each other, Sandra, and the opposing party
Under NRS 645.255(4), when designated agents are appointed within a limited dual agency brokerage arrangement, each designated agent owes full confidentiality to their respective client. This means Paul cannot disclose Mr. Kim's minimum price to anyone — including Wendy, Sandra, or Ms. Torres — and Wendy cannot disclose Ms. Torres's maximum price to anyone — including Paul, Sandra, or Mr. Kim. The designated agent structure creates an information barrier (sometimes called an ethical wall) within the brokerage. Sandra, as the limited dual agent broker, is also prohibited from using confidential pricing information from either side to broker a deal.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
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