Fiduciary duties owed to a client

The client comes first

A fiduciary acts for a client, also called the principal, in a relationship of trust. Fiduciary duties go beyond ordinary customer service. Representing a client still requires honest and fair treatment of other parties.

Six duties

• Obedience: follow lawful instructions within the agency's scope. Honor a seller's showing schedule; refuse an unlawful discriminatory instruction.
• Loyalty: put the client's interests ahead of personal advantage. Do not steer a buyer toward a less suitable home for a larger commission. Disclose and appropriately address financial conflicts.
• Disclosure: communicate information material to the client's decisions. Present relevant facts and offers; advise the client without taking over the client's decisions. Texas's broker responsibility rule requires conveying known information that may affect the principal's decision unless prohibited by other law (22 Tex. Admin. Code § 535.2(b)).
• Confidentiality: protect private bargaining limits and motivations. This duty generally survives termination of agency. It does not permit withholding legally required disclosures of property defects.
• Accounting: safeguard and accurately record entrusted money and property. Commingling mixes client and personal funds; conversion uses entrusted funds for an unauthorized purpose, such as paying the agent's expenses.
• Reasonable care: exercise professional competence and diligence, track deadlines, communicate promptly, and recommend qualified specialists when appropriate. This duty does not guarantee investment success.

Apply the duties together

An agent who reveals a seller's private minimum price to speed a sale may breach both confidentiality and loyalty. A customer who asks a question does not thereby become the agent's client. Identify the client, the information or property involved, and the conduct required.

These are general agency principles. Authorized representation arrangements can modify their operation; Texas statutory intermediary duties supersede conflicting common-law duties (Tex. Occ. Code § 1101.561).