Difficulty: Easy

Average Score: 75%

In a jurisdiction where the common law of agency governs, when does the agency relationship between a seller and a listing broker end

Rationale

B) confidentiality

The broker's duty of confidentiality prevents them from disclosing any information about the seller's situation, including the urgency of their need to sell due to job relocation. This duty ensures that the seller's private information remains protected and that their interests are prioritized in the transaction.

A (agency never expires) YOUR ANSWER

The duty of accounting requires the broker to provide a detailed accounting of all funds and property transactions related to the agency relationship. While important for financial transparency, this duty does not pertain to the sharing of confidential information about the seller's circumstances.

C (when the deed or mortgage is signed and recorded) YOUR ANSWER

The duty of disclosure involves informing the client about relevant information that could affect the transaction. However, in this context, disclosure refers to the broker's obligation to inform the seller of material facts about the property or transaction, not the obligation to disclose the seller's personal circumstances to the buyer.

D (when transaction has occurred as specified in the listing agreement) CORRECT

The duty of obedience requires the broker to follow the lawful instructions of the principal (the seller) in their agency relationship. While the broker must adhere to the seller's wishes, this duty does not extend to revealing the seller's confidential information to the buyer.

Conclusion

In agency relationships governed by common law, the broker's duty of confidentiality is paramount, especially when it comes to sensitive information such as the seller's urgency to relocate. Protecting this information is essential to maintain trust and uphold the broker's fiduciary responsibilities. Other duties like accounting, disclosure, and obedience are important but do not justify revealing confidential information that could compromise the seller's position in the transaction.

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