Which duty is owed by the broker to a principal in a single-agency relationship that is not owed to a customer in a transaction broker relationship?

Which duty is owed by the broker to a principal in a single-agency relationship that is not owed to a customer in a transaction broker relationship?

• A. Loyalty
• B. Honesty
• C. Disclosure
• D. Care and diligence

Answer: (A)

Single agency creates a fiduciary duty to the principal, including loyalty. Loyalty requires the broker to put the principal’s interests first, act to obtain favorable terms for the principal, avoid conflicts, and protect confidential information. In a transaction broker relationship there is no fiduciary relationship, and the broker’s duties are limited to dealing honestly and fairly, disclosing known facts, and handling funds properly. Because loyalty is tied to representing the principal exclusively, it is not owed to a customer in a transaction broker arrangement, while honesty, disclosure, and care and diligence remain duties in that scenario. Therefore, loyalty is the duty unique to single agency.

Single agency creates a fiduciary duty to the principal, including loyalty. Loyalty requires the broker to put the principal’s interests first, act to obtain favorable terms for the principal, avoid conflicts, and protect confidential information. In a transaction broker relationship there is no fiduciary relationship, and the broker’s duties are limited to dealing honestly and fairly, disclosing known facts, and handling funds properly. Because loyalty is tied to representing the principal exclusively, it is not owed to a customer in a transaction broker arrangement, while honesty, disclosure, and care and diligence remain duties in that scenario. Therefore, loyalty is the duty unique to single agency.