Agency and Fiduciary Duties Flashcards
7 cards from real Arkansas Real Estate License practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Agency and Fiduciary Duties flashcards as text
A licensee tells the buyer that a neighborhood is experiencing a lot of crime to discourage them from buying there. This could constitute a violation of:
Answer: Both the duty of honesty and fair housing laws
Steering buyers away from areas based on neighborhood composition violates fair housing law, and making unsubstantiated crime claims violates the duty of honesty.
Broker Kim lists a property and later wants to personally purchase it. Under Arkansas law, Kim must:
Answer: Disclose her licensed status and the agency relationship in writing to the seller
Arkansas requires licensees purchasing property they list to fully disclose their licensed status and the nature of the relationship to avoid a breach of fiduciary duty.
What is 'vicarious liability' in the context of Arkansas real estate agency?
Answer: A broker's potential legal responsibility for the authorized acts of their affiliated licensees
Vicarious liability means a broker can be held responsible for the wrongful acts of their sponsored licensees when those acts fall within the scope of the agency.
A seller's agent learns of a zoning change that will reduce the property's value. Disclosing this to the buyer is an example of fulfilling the duty of:
Answer: Disclosure of material facts
Material facts that affect the value or desirability of a property must be disclosed to all parties, even when the agent represents the seller.
If a buyer's agent follows a client instruction that the agent believes is unwise but legal, this reflects which fiduciary duty?
Answer: Obedience
The duty of obedience requires agents to follow all lawful instructions from their client, even if the agent disagrees with the decision.
In Arkansas, which of the following would NOT create an agency relationship?
Answer: A licensee handing a buyer a property flyer
Simply providing marketing materials does not create an agency relationship; there must be an agreement — written, oral, or implied by conduct — to represent the party.
An agent who represents a seller but negotiates in the buyer's favor to speed up the sale is violating which duty?
Answer: Loyalty
The duty of loyalty requires the listing agent to negotiate in the seller's best interest, not the buyer's or the agent's own interest in closing quickly.