Sole agency is a relationship in which the brokerage or industry member acts as the agent for only one party in a trade. The essence of the agency relationship is that the agent has authority to represent the client in a real estate transaction.
In sole agency, agents are obligated to protect and promote the interests of their clients. Specifically, a sole agent owes his or her clients the following duties:
Undivided loyalty: the agent must act solely in the client’s best interests, must always put the client’s interests above the agent’s own interests and above the interests of other parties. This means avoiding conflicts of interest and protecting the client’s negotiating position at all times.
Confidentiality: the agent has a duty to keep the client’s confidences. Confidential information includes any information about the client, the property, or the transaction that is not required by law to be disclosed, but if disclosed could be used by another party to the disadvantage of the client. The duty of confidentiality continues even after the agency relationship ends.
Full disclosure: the agent must inform the client of all facts known to the agent that might affect the relationship with the client or influence the client’s decision in the transaction. This includes any conflicts of interest the agent might have in providing services to the client. The agent should not decide if information is important to the client, rather, the agent is obligated to disclose all relevant information to the client. However, any confidential information from a previous agency relationship will not be disclosed to the client unless the previous client agrees in writing.
Obedience: The agent must obey all of the client’s lawful instructions, as long as instructions are reasonable and ordinary under the circumstances. If the client insists the agent do something unlawful, the agent would be obliged to refuse, and consider terminating the relationship and existing service agreement.
Reasonable care and skill: The agent must exercise reasonable care and skill in performing all assigned duties. The agent is expected to meet the standard of care that a reasonable and competent industry member would exercise in a similar situation.
Full accounting: The agent must account for all money and property placed in the agent’s hands while acting on the client’s behalf.