A broker provides services to both a buyer and a seller in a transaction without disclosing their dual agency status. This is an example of:
Question & Answer
Review the question and all answer choices
deniable agency.
Deniable agency is not a recognized legal concept in real estate agency. This option likely represents a misunderstanding of agency terminology, as 'deniable' is not a standard classification for agency relationships.
ostensible agency.
Ostensible agency refers to an agency relationship created by the actions of the principal that lead a third party to reasonably believe an agency exists. This doesn't apply to the failure to disclose dual agency.
voidable agency.
ratified agency.
Ratified agency occurs when a principal accepts the benefits of an unauthorized act by an agent, thereby affirming the agency relationship. This is unrelated to the scenario of failing to disclose dual agency.
Why is this correct?
Voidable agency is correct because when a broker fails to disclose dual agency as required by California law, the agency relationship is improperly formed and can be terminated (voided) by either party due to the lack of informed consent.
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