Duties Owed to Clients
Fiduciary Duty
Fiduciary duty requires real estate agents to act in the client’s interest ahead of their own, which involves leveraging their superior skills and knowledge to benefit the client and not simply to earn a commission. This comprehensive responsibility ensures that the client relationship is built on ethical conduct and that the clients are treated fairly. There are significant legal and professional consequences for violating this duty.
Confidentiality
Real estate agents have ethical and legal obligations to keep their clients’ information confidential. For example, a seller may need to sell the property quickly and would accept a low offer. Still, the agent must keep this information confidential and not share it with a potential buyer or other realtors.
Full Disclosure
Disclosure means that a real estate agent must inform their principal about all relevant information, including offers, property values, the intentions of buyers or sellers, and any other factors that could influence the transaction. Additionally, they are responsible for treating non-principals honestly and fairly by disclosing relevant material facts. This transparency allows clients to make informed decisions about their transactions.
Obedience
Whether a listing agent or an agent representing the seller, obedience requires the Realtor to adhere to all lawful instructions from their principals, but they are not required to follow any unlawful directives.
Reasonable Care and Skill
Whether acting as a seller’s agent or buyer’s agent, the real estate agent must apply their professional expertise to act competently and conduct thorough investigations of relevant facts to protect their principal’s interests. The average person is unfamiliar with the basic principles of buying property or what pertinent facts should be noted.
Accounting
Real estate agents are legally obligated to safeguard and accurately account for all money, property, and documents entrusted to them by their principals. Accurate records are essential in all real estate transactions. A real estate broker has a trust account to hold earnest money and other funds separate from their own.
Loyatly
Real estate professionals must act exclusively in the principal’s best interests and avoid any conflicts of interest. For instance, they must not profit from property transactions at the principal’s expense.
Duties Owed to Others in the Transaction
Honesty and Integrity
In the real estate community, much depends on the other party’s ability to trust that the real estate agents will provide accurate information in their real estate dealings. A real estate agent can get a damaged reputation by withholding material facts or not acting appropriately when conflicts arise.
In real estate transactions, the responsibilities owed to others are fundamental and non-negotiable. It begins with a commitment to honesty and integrity, where representing property accurately is paramount. It’s essential not to mislead or deceive any party involved, ensuring trust remains the cornerstone of all interactions.
Fair Dealing
Fair dealing extends beyond simple compliance; it encompasses a dedication to treating everyone involved in the transaction with respect and impartiality. Building positive relationships among all parties fosters good faith and a healthier transaction environment and enhances the overall experience for everyone involved.
Disclosure of Material Facts
Sellers have an independent duty imposed by the real estate purchase contract “to disclose material known defects that cannot be discovered by a reasonable inspection by an ordinary prudent buyer.” In real estate matters, superior knowledge is attributed to sellers and their real estate agents.
Fair dealing and good faith are essential, requiring respect and impartiality toward everyone involved in real estate transactions. By building positive relationships, stakeholders can enhance the overall transaction experience. Moreover, disclosing material facts is vital to prevent misunderstandings and promote transparency, enabling informed decision-making.
Compliance with laws and regulations is both a legal and moral obligation, safeguarding the interests of all parties. This comprehensive approach emphasizes the essential responsibilities of a Utah real estate licensee, promoting a fair, respectful, and transparent transaction environment in real estate matters superior to individual gains.
Compliance with laws and regulations
The need for compliance with laws and regulations further highlights the importance of these duties. For real estate professionals, adhering to all federal, state, and local laws governing real estate dealings is a legal and moral obligation. By staying informed about any changes to these laws, agents can ensure that their actions remain within the legal framework, thereby protecting the personal interests of all parties involved, including the buyer and the property owner.