I was reminded of this issue while posting on another thread earlier today and thought whatever I'm writing here will be lost, and this matter deserves attention of its own. I do not see that it has been discussed before, and thought I'd like to hear the opinions (or non-opinions) on the Subject. The issue is one that arises when you get involved in representing a Customer, as a Buyer Client, on a Property on which you, or your Agency, previously had a Listing Contract.

Presenting Expired Listings to current Buyer Clients can be fairly simple when you're dealing only with the Expired Listings of Other Agencies. But it gets a little dicey when it's your own Expired Client. Technically, some of your Fiduciary Responsibilities to that Seller Client (like Care, Obedience, Accounting, Loyalty and (Non-)Disclosure), even after the Listing Expired, Continue on in Perpetuity. So some Authorities (including some Attorneys) would challenge the Ethics and/or Legality of the same Agency now taking a position in opposition to the Former Seller Client by representing a new Buyer Client in a Transaction.

I haven't seen this matter (of Conflicting or Overlapping Fiduciaries) discussed here; and it may deserve its own Thread. I just know I have felt very uncomfortable, when a former Listing of mine, and one where I possess substantial "Confidential Information" about the Seller, is now listed by another Agency and I am presenting the Property to a Customer (or worse, a Buyer Client). It's a matter to be resolved in the Courts (hopefully without my involvement) But, in the meantime, I can't nickel and dime myself out of business ! You simply can't always take the completely safe route without being crippled in your activities.

Have any of you encountered this situation before . . . . or thought about it, in anticipation ?

Excellent point about the never ending fiduciary obligations by an agent to their clients.
The solution for me, would be the fallback position of Transaction Broker, to be able to continue working with my buyer.
Obviously, the best way to handle this is to make the buyer aware that a scenario such as this is a remote possibility.

The fact, that someone else in my company had the property listed previously, would not require me to change my relationship with my buyer, since I would not have been privy to fiduciary information of the seller.

Vermont007: This is a very good question and one that should be seriously considered by all, where the law of agency prevails.

Your assessment of the issue involved is accurate, in that no fiduciary duty is owed to "non-clients" but that a fiduciary duty is owed to both past and present "clients" and that said duty runs in perputuity.

In the event, your former client the seller should want to nullify the transaction and/or make a claim for damages, his attorney could allege that you breached your fiduciary duty to your former client and that you utilized your former clients personal and confidential information to their detriment.

Further, the attorney would suggest, that unless you are prepared to settle the matter,$$$$$$ the attorney would be compelled to file an action against both you and your buyer in the current transaction.

At trial, one of the issue might be the determination of the actual amount of damages sustained by the seller/plaintiff, together with the possible unravelling of the current transaction, plus legal costs for the plaintiff.

The current buyer, if also in a fiduciary relationship with the agent could, in turn file an action against the agent on basically the same grounds and seek both damages and legal costs incurred in his defence and in his cross-action against the agent.

In order for the agent in this instance, to reduce his/her risk of being a defendant in a lawsuit initiated by the both the seller and/or the buyer, the agent might consider preparing and executing the following documentation should the need ever arise.

_ written disclsoure to the seller and a waiver of the agents fiduciary duty in this transaction.

_a request that the seller seek or waive obtaining Independent Lega Advice.

_written "ACKNOWLEDGEMENT" of the aforementioned Disclosure and applicable " Waiver's"

The main purpose of the foregoing documentation is that all parties are fully informed and that they do have the opportunity to seek and obtain independent legal advice and that in any event they will have the opportunity of making an informed decision with respect to their waivers and acknowledgements.

When everything has been disclosed and acknowledged, from that moment on an attorney would have great difficulty in mounting a successful case against the agent, provided the seller actually wants to sell his current property and the buyer want to buy the seller's property.

Your documentation must be timely, clear, precise and unequivocal

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information

In NC our fiduciary responsibility ends when the contract ends.

"In NC our fiduciary responsibility ends when the contract ends."

Interesting! So, after the designated contractual timeframe, you can disclose any personal confidential information about your client to anyone?
Do you have a state specific legal reference for this?

Fiduciary: I believe that is was William Shakespeare who once said that "a rose by any other name is still a rose".

On the surface, it would appear that the State of North Carolina agrees and has some strong views on fiduciary duty as was observed at the following websites.

http://www.ncga.state.nc.us/gascripts/Statutes/StatutesTOC.pl?Chapter=0032

http://www.ncbusinesslitigationreport.com/articles/fiduciary-duty

which seems to indicate that their thinking together with their judicial decisions, is in accord with what William Shakespeare said many years ago.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information.

This was talked about in CE and we were told our fiduciary responsibility does not last for perpetuity. When a client fires us they take on this risk, it is not passed onto us.

Now, over the years I have been taught other things which turned out to be wrong but after looking at the above links and on the NCREC website I could not find anything to counter this.

If someone can reference a NC real estate law confirming this one way or the other I would appreciate it.

If the state law does not address this issue, our COE SOP 1-9 sure does.

http://www.realtor.org/MemPolWeb.nsf/pages/COde

Fiduciary in Perpetuity - Applying Murphy’s Law "if anything can go wrong, it will."

Courts that do not wish to have their decisions reversed on appeal, are prone to primarily base their decisions and the reasons supporting those decisions on (res judica) long established and accepted caselaw.

Fiduciary duty and the elements thereof has been established in law world wide,dating back some three hundred years.

Of course, there is nothing in law precluding an agent from putting forth the argument that somehow he was excluded from compliance with his fiduciary duty or that he personally could find no law compelling his compliance, etc. etc. etc.

I have no doubt, that such an agent would learn a valuable and costly lesson.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information

according to my understanding of agency law, the duty of confidentiality is probably the ONLY duty that may survive the extinction or termination of an employment agreement such as a listing.

clearly, if the gamut of an agent's fiduciary duties survived indefinitely, it would become impossible for an experienced agent to represent anyone effectively as a fiduciary. the law must resolve those types of conflicts.

such personal/confidential information obtained from a past client should not be an issue in current dealings with a prospective buyer. the only potential conflict I can see is where a client's confidential information may conflict with a statutory duty imposed on the agent. in this case, the path is clear.

The accepted solution

The accepted solution to a conflict of interest and one’s fiduciary duty has been to fully disclose the possibility of a conflict of interest.

One example might be that an agent now acting as a buyer’s agent had previously represented the seller as their buyer’s agent when the seller had originally bought the subject property.

Another example would be an agent representing more than one buyer on the purchase of the same property, without any disclosure whatsoever.

In most jurisdiction, it is my understanding that the legal profession has mandated disclosure to all parties of a conflict of interest situation.

The parties, then have the opportunity to raise any objections they may have and failing to do so, forestalls any objections the parties may have or develop at a later date, and freeing the attorney to (safely) proceed with the representation of their current client.

This disclosure requirement is also similar to a situation where a corporate executive officer or a politician who fails to disclose a conflict of interest prior to voting on a particular matter.

Imagine a politician voting on a zoning change with an undeclared interest in the subject property.

In all instances, without adequate and timely disclosure, there can be unnecessary and costly consequences.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .