Washington broker Alex represents buyer Nina as a client. During due diligence, Nina tells Alex she has discovered the property has a minor crack in the foundation but she still wants to proceed and does not want the seller to know she found it. Alex knows that if the seller were aware Nina discovered the defect, the seller might reduce the price further. Under RCW 18.86, which statement BEST describes Alex's obligations?
Correct Answer
D) Alex must keep Nina's discovery confidential from the seller because it is confidential client information, while ensuring Nina has made an informed decision to proceed
Under RCW 18.86.040(1)(c), Alex owes Nina the duty of confidentiality and must not disclose Nina's confidential information — including her private discovery during due diligence — without Nina's authorization. Nina's knowledge of the defect and her decision to proceed despite it is information that belongs to Nina as the buyer-client. Alex does not represent the seller and owes the seller only good faith and honesty (not disclosure of the buyer's private findings). Alex should ensure Nina is making an informed decision, but he must keep her discovery confidential from the seller.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
In real estate, a client is someone to whom the agent owes fiduciary duties through an agency relationship, while a customer is a third party to whom the agent owes only honesty and fair dealing.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
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