New York State Real Estate Salesperson Licensing Exam

What fiduciary duty does the listing agent owe the seller who filed for bankruptcy but did not list their property?

1. Disclosure

2. Confidentiality

3. Obedience

4. Accountability

The correct answer is: Confidentiality

The fiduciary duty that the listing agent owes the seller, even in the context of a bankruptcy filing and without a formal listing, is confidentiality. This duty remains critical because it ensures that any personal or financial information related to the seller's situation is kept private. In real estate relationships, confidentiality means that the agent cannot disclose any information about the seller’s financial condition or their decision not to list the property without permission. This is particularly important when a seller is experiencing financial distress, as any information could potentially impact their financial situation or negotiations. The other duties, such as disclosure, obedience, or accountability, would not apply in the same capacity under these circumstances. Disclosure typically relates to informing parties about material facts regarding the property, while obedience involves following the lawful instructions of the client. Accountability deals with recording and accurately managing funds or documents related to the transaction. However, in instances where the property isn't listed, the agent's responsibility to maintain confidentiality remains paramount.