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Pass California

Agency and Fiduciary Duties, 17% of the examination

Secret profit

An undisclosed financial benefit an agent obtains from the agency or transaction in breach of loyalty to the principal.

A fiduciary must disclose material compensation, interests, and benefits connected with the transaction and obtain any required consent. Calling the amount a referral fee, rebate, spread, or marketing payment does not remove the disclosure issue.

See also

Fiduciary dutyThe duty of trust and confidence an agent owes a principal.

Test the distinction

A relevant question from Contracts, selected because its facts or explanation use this concept.

Contracts ยท 12%Listing Agreements

A net listing sets the seller's net at $700,000 and the property sells for $790,000. What must the broker do?

Written to DRE's published topic list. Not a real examination question, since reproducing those is a misdemeanor under B&P Code section 123.

Primary sources

Use these authorities when a course summary, forum answer, or older flashcard conflicts with the current California rule.

Where this is tested

Laws of Agency and Fiduciary DutiesWho you represent, when that duty begins, and what you owe someone you do not represent. California runs its own disclosure regime and permits dual agency with consent, which is where borrowed national study material fails.17%Practice Agency and Fiduciary Duties34 questions on this area, every option explained.Practice

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