RES exam question on Ethics & Professional Conduct: duties that Samantha owes to her buyer client
Samantha is a registered salesperson acting exclusively as a buyer's agent for a client purchasing a private apartment. Consider the following duties: (i) Negotiate the lowest possible price and best terms on the client's behalf. (ii) Disclose to the client all material facts about the property that Samantha knows or ought to know. (iii) Keep the client's maximum budget strictly confidential and not reveal it to the seller or seller's agent. (iv) Advise the client on the significance of clauses in the Option to Purchase before the client signs. Which of these statements correctly describe duties that Samantha owes to her buyer client?
- A(i) and (ii) only
- B(i), (ii) and (iii) only
- C(ii), (iii) and (iv) only
- D(i), (ii), (iii) and (iv)
Show answer & explanation
Answer
D. (i), (ii), (iii) and (iv)
Explanation
A buyer's agent owes fiduciary duties of loyalty and confidentiality as well as a duty of skill and care to the client. All four statements describe genuine obligations: (i) duty to achieve best deal; (ii) duty to disclose material facts; (iii) duty of confidentiality (not to disclose the client's financial ceiling to the other side); and (iv) duty to advise on contractual terms. Revealing the buyer's maximum budget to the seller would be a serious breach of the agent's duty to the client.
Study the concept behind this question: Dual Representation & Conflict of Interest (RES)
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