Broker Lisa at Blackstone Realty in Rhode Island designates agent Tom to represent seller Dan and agent Amy to represent buyer Carla in the same in-house transaction. Both Dan and Carla have signed written designated agency consent forms. During negotiations, Tom learns that Dan would accept $15,000 less than the listed price. Under Rhode Island's designated agency framework, which of the following correctly describes Tom's obligations?
Correct Answer
D) Tom must keep Dan's bottom-line price confidential from Amy and Carla, as his exclusive duty of loyalty runs to Dan
Under R.I. Gen. Laws § 5-20.6, in a designated agency arrangement, Tom acts as Dan's exclusive representative and owes Dan the full fiduciary duty of loyalty and confidentiality. Dan's willingness to accept a lower price is confidential client information that Tom must protect. The fact that the broker is a dual agent does not require Tom to share Dan's confidential information with Amy or Carla — the entire purpose of designated agency is to preserve exclusive representation and confidentiality at the licensee level.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
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