Broker Todd represents buyer Naomi in her purchase of a home in Issaquah. After the purchase and sale agreement is signed, Naomi tells Todd she is planning to immediately flip the property and has already lined up a buyer willing to pay $80,000 more. The seller, unaware of this plan, is now having second thoughts about selling. Under RCW 18.86, which statement BEST describes Todd's obligations regarding Naomi's flip plan?
Correct Answer
B) Todd must maintain confidentiality of Naomi's business plans, as this is protected client information under his duty to Naomi
Under RCW 18.86.040, Todd owes Naomi a duty of confidentiality, which includes her business plans and investment strategy. A buyer's intent to resell the property after purchase is not a material fact about the property's physical condition or title — it is personal business information belonging to the buyer. Todd must maintain confidentiality of this information. The seller's second thoughts do not change Todd's obligation to his client. This is a classic expert-level trap: candidates may confuse the buyer's investment intent with a 'material fact' requiring disclosure, but Washington's agency law protects client business strategy as confidential.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The extent of power and actions an agent is authorized to perform on behalf of the principal, as defined by the agency agreement.
The fiduciary obligations owed by a listing agent to the seller, including marketing the property, presenting all offers, and protecting the seller's confidential information.
A practice where the agent or brokerage represents only one party in a transaction — either the buyer or the seller, but never both.
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