Question

Broker finds a cooperating broker without noticing the principal, who does the cooperating broker owe fiduciary duties to?

Selections

A. Principal

B. The original broker

C. No one

D. None of the above

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Answer: A

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5 Keys Summary

• The cooperating broker, who finds a buyer for a property listed by another agent, implicitly becomes a subagent in the transaction.

• The primary responsibility and legal fiduciary duty of any agent, including a cooperating broker, are owed to the Principal (the client or seller).

• This fiduciary relationship requires the agent to act with the utmost care, loyalty, and good faith in the best interests of the principal.

• Even if the principal is not directly notified of the cooperating broker’s specific involvement, the cooperating broker’s fiduciary duties extend to that original principal.

• This responsibility is reinforced by the imputed knowledge rule, which dictates that information known by the cooperating broker is legally presumed to be known by the principal.

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