Laws of Agency and Fiduciary Duties

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Question #1

Taylor is the owner of a new apartment building. She has 15 units she needs to lease, so she has enlisted Pablo as her agent. Is Pablo required to give Taylor an agency disclosure form?

A No, agency disclosure is not required for residential transactions involving five or more units.

B Yes, agency disclosure is required for lease transactions.

C No, agency disclosure is only required for commercial transactions.

D No, agency disclosure is only required on sales of residential properties.

Question #2

Which of the following is an example of the duty of loyalty?

A Putting the client’s interest first

B Carrying out a client’s instructions without question

C Never questioning a client’s opinion

D Keeping a client’s confidential information confidential

Question #3

Which of the following is the most serious consequence of treating a customer as a client?

A Drumming up potential business

B Working for someone for free

C Wasting your time

D Breaching your duty to your actual client

Question #4

Gillian is a real estate licensee who attends a party at the home of a mortgage broker, Tim, with whom she has worked in the past. At the party, Tim offers Gillian tickets to a concert, saying that he can’t use them. She accepts gladly, and laughs when Tim says as he hands the tickets over, “And all I ask in return is that you send a customer or two my way!” Is Gillian guilty of a violation?

A Yes, Gillian is guilty because she has accepted what is essentially a referral fee from a mortgage broker.

B No, but Tim is.

C No, there is no violation.

D Not unless she neglects to disclose the exchange and the value of the tickets to her broker within three days.

Question #5

Danielle is selling her home and has enlisted Camden as her agent. Shortly after signing the listing agreement, Camden informs Danielle that he’d like to purchase her home. What can Danielle do?

A She already signed the listing agreement with Camden. She must fulfill the contract.

B Danielle must cancel the listing agreement.

C Danielle must accept Camden’s offer.

D Danielle may cancel the listing agreement and seek representation from another agent.

Question #6

Kennedy tends to be rather informal about her real estate business. Her daughter’s teacher, Matthew, tells Kennedy that he’d like her help selling his house. Kennedy agrees and tells Matthew she’ll perform all the tasks she’d perform for any listing, though she has no written agency agreement with Matthew. Do Matthew and Kennedy have a legal agreement?

A No. There’s no signed agreement.

B Yes. Express agreements may be verbal or written.

C Yes. They have a verbal implied agreement.

D No. Verbal agreements are illegal.

Question #7

As Tina’s agent, Marcus has broad responsibility to handle all the details of a specific transaction. What type of agent is Marcus?

A Specific or special

B General

C Dual

D Limited

Question #8

Kevin listed his house with you but isn’t offering a cooperating agent’s commission. Ji-eun represents the buyer, Marta, and Marta’s parents, Jean and Tom, are paying Ji-eun’s commission. On which of these factors is your agency relationship based?

A Kevin signed a listing agreement with you.

B Kevin owns the property you’ve listed.

C Kevin is paying your commission.

D Marta’s parents are paying the buyer’s agent commission.

Question #9

Gregory is looking for an apartment to rent for six months. He’s hired Franklin as his agent to help with this search. Is Franklin required to provide Gregory with an agency disclosure form?

A No, agency disclosure is only required for commercial transactions.

B No, agency disclosure is only required on sales of residential properties.

C No, agency disclosure is only required for lease agreements exceeding one year in length.

D Yes, agency disclosure is required for lease transactions.

Question #10

Many of an agent’s fiduciary duties to the client end upon termination of an agency agreement. Which fiduciary duty never ends?

A Confidentiality

B Loyalty

C Obedience

D Reasonable skill and care

Question #11

Ginnie’s Aunt Becca listed the old family mansion with Ginnie. Ginnie put it on the market for Becca, but then she and her cousins talked with Becca and decided they wanted to keep the property in the family. What’s the best way to terminate the agreement?

A They should wait for the listing to expire.

B Ginnie should renounce the listing.

C Ginnie and Becca can mutually agree to terminate the agreement.

D Becca should revoke the listing.

Question #12

Henry is Monica’s listing agent. As Monica’s agent, Henry has a duty to account for and properly handle her funds and ______.

A Financial investments

B Personal savings

C Paperwork

D Property taxes

Question #13

Which of the following statements about the fiduciary duty of confidentiality is true?

A It encompasses any and all information the client tells the agent, not just confidential information.

B It never conflicts with the duty of disclosure.

C It doesn’t extend to material facts relating to the property.

D It ends with the termination of the agency agreement.

Question #14

To whom must a licensee, representing a buyer, disclose agency status?

A Buyer

B Broker

C All parties in the transaction

D Seller

Question #15

At what point must an agency disclosure be given?

A As soon as the relationship becomes more than casual

B At the first contact

C At the first conversation

D At the first in-person meeting

Question #16

Cam is a broker. His licensees, Jane and John, represent two sides in a single transaction. Jane represents the seller; John represents the buyer. What relationship does Cam have to the buyer and the seller?

A Cam is a designated agent to both the buyer and seller.

B Cam is a designated agent to the buyer and a dual agent to the seller.

C Cam is a dual agent to both the buyer and seller.

D Cam is a designated agent to the seller and a dual agent to the buyer.

Question #17

Shari’s clients want her to post that there are “no showings on weekends” on the MLS. Shari knows that will significantly cut down on their market exposure. Her duty of reasonable skill and care is in conflict with her duty of ______.

A Loyalty

B Disclosure

C Accounting

D Obedience

Question #18

Jenny is selling her property and has hired Larry as her agent. After the property’s listed, Jane brings her client, Andrew, to see the property, and he decides to make an offer. Who is Jane in this scenario?

A A dual agent

B A seller’s agent

C A buyer’s agent

D A sub-agent

Question #19

Gary’s new seller client is concerned about privacy and doesn’t want her listing posted on the MLS. Gary explains to her the potential impact this will have on marketing her property, but the client remains adamant. Gary doesn’t list the property on the MLS. What fiduciary duty is at play?

A The duty of disclosure

B The duty of loyalty

C The duty of confidentiality

D The duty of obedience

Question #20

Trina’s property is listed with Avalon Homes. The market is a little slow, and Trina’s listing is a high-end home, where sales are even slower. She’s had several showings, but no offers. The term of the listing agreement is nearly over. What happens when the termination date is reached?

A The listing expires and is automatically terminated.

B Trina’s agent may still try to sell the property.

C Trina owes Avalon whatever compensation was noted in the listing agreement.

D Trina can’t extend the listing agreement, so she’ll have to list with another brokerage firm.

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Laws of Agency and Fiduciary Duties

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