Fiduciary Duties

FIDUCIARY DUTIES

duties owed by an Agent to their Principal in that particular Transaction
(not their Customer) 

“These duties are. . .the law—the common law of agency and/or the statutory law governing real estate transactions. Under the common law of agency and agent owes the principal the six duties of care, obedience, loyalty, disclosure, accounting, and confidentiality.” 

Care—“Principals expect the agent’s skill and expertise in real estate matters to be superior to that of the average person.” “Agents must exercise a reasonable degree of care while transacting the business entrusted to them by principals.” 

Obedience—“The fiduciary relationship obligates an agent to act in good faith at all times, obeying the principal’s lawful instructions in accordance with the contract.” 

Loyalty—“The duty of loyalty requires that the agent place the principal’s interests above those of all others, including the agent’s own self-interest.” 

Disclosure—“It is the agent’s duty to keep the principal informed of all facts or information that might affect a transaction.” It “includes relevant information or material facts the agent knows or in some cases should have known” 

Accounting—“The agent must be able to report the status of all funds received from or on behalf of the principal.” 

Confidentiality—“An agent may not disclose the principal’s personal information. . . .Depending, upon state law, the duty of confidentiality . . . could extend for a number of years, or forever.” 


All quotes from  Modern Real Estate Practice, 20th Edition, by Fillmore W. Galaty, Wellington J. Allaway and Robert C. Kyle with Martha R. Williams, JD, Contributing Editor, Dearborn Real Estate Education.