A Tennessee affiliate broker, Kevin, is representing the Robinsons as buyer's agents. After a home inspection, the inspector identifies a significant HVAC issue. Kevin, who has no HVAC expertise, tells the Robinsons the issue is 'minor and easily fixed' to keep the deal moving forward because he needs the commission. Which fiduciary duty has Kevin most clearly violated?
Correct Answer
B) Loyalty, by prioritizing his commission over the Robinsons' best interests
Kevin has violated the fiduciary duty of loyalty by prioritizing his own financial interest (earning the commission) over the Robinsons' best interests. Under Tenn. Code Ann. § 62-13-401 et seq., loyalty requires that an agent place the client's interests above all others, including the agent's own. Downplaying a significant inspection finding to preserve a deal and earn a commission is a textbook breach of loyalty.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
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.
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