David is a Tennessee affiliate broker who has been working with the Nguyens for six weeks to find a home. During that time, the Nguyens confided that they must close within 45 days due to a job relocation. David recently obtained his broker-in-charge designation and opened his own firm. He finds a property that he personally owns and shows it to the Nguyens without disclosing his ownership interest. Which fiduciary duty has David most directly violated?
Correct Answer
A) Loyalty, by failing to prioritize the Nguyens' interests over his own financial gain
By failing to disclose his ownership interest in the property he is showing to his clients, David has violated the fiduciary duty of loyalty. Under Tenn. Code Ann. § 62-13-401 et seq., a licensee must place the client's interests above their own and must fully disclose any personal interest in a property being presented to a client. Selling one's own property to a client without disclosure creates a direct conflict of interest that breaches loyalty.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A relationship where a listing broker authorizes other brokers to act as agents of the seller, extending the seller's agency relationship to cooperating brokers.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
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