Agency Relationships, Disclosures and Fiduciary Duties
Agency Relationships
Creating the relationship
Agency can arise by express agreement, implication, or ratification. New Hampshire requires prompt and generally written disclosure of whom the licensee represents before services are provided. The common models are seller agency, buyer agency, disclosed dual agency with written consent, and designated agency, where different agents in one firm represent each side behind confidentiality walls. Undisclosed dual agency is prohibited.
Clients and customers
A client has an agency relationship; a customer does not. Fiduciary duties owed to clients include care, obedience to lawful instructions, loyalty, disclosure, accounting, and confidentiality. A customer is entitled to honesty and fair dealing but not loyalty or confidentiality. A cooperating buyer's agent is not automatically a subagent of the listing broker; subagency requires agreement.
Termination and traps
Agency ends by performance, expiration, mutual agreement, revocation, or death or incapacity. Confidentiality obligations may survive termination. Common traps: assuming a buyer's agent is free because the seller pays the commission; assuming any agent who shows a buyer represents the buyer; failing to obtain written consent to dual agency; and confusing designated agency with dual agency.
Worked example: Listing agent Alice shows her own listing to unrepresented buyer Bob. If Alice begins advocating for Bob's interests, she has created dual agency and must disclose it and obtain written consent. Otherwise she remains the seller's agent and must not share the seller's confidential motivations with Bob.
Rule of thumb: representation follows disclosure and agreement, not who happens to pay the commission.
Disclosures and Fiduciary Duties
Required disclosures
New Hampshire requires a written seller property disclosure for typical residential transfers, covering known conditions such as water, septic, structural, and environmental issues. Federal law requires lead-based paint disclosure for pre-1978 housing. Licensees must also make agency disclosure and disclose any personal interest in a transaction, such as buying a listing through their own firm. Material facts must be disclosed even when inconvenient.
Fiduciary duties in practice
Care means reasonable competence and verification. Loyalty means no self-dealing and no advancing a competing party's interest. Disclosure means revealing known material facts, not just answering questions truthfully. Accounting means promptly handling money and documents. Confidentiality protects the client's negotiating position, but it never authorizes fraud or concealment of a material defect.
Traps
A seller's instruction to stay silent does not let an agent lie. An as-is sale does not erase disclosure obligations or known latent defects. A stigmatized property question, such as a past crime or illness, can be sensitive; follow current state law and fair housing rules rather than guessing. Agents also must avoid disclosing a client's motivation or financial urgency to the other side.
Worked example: A seller tells the agent the basement flooded twice. A buyer asks whether there have been water problems. The agent may not answer no and may not simply remain silent while the buyer relies on a false impression. The agent must disclose the known material fact or withdraw from the representation.
Rule of thumb: if the client says do not tell, the agent's choices are disclose or terminate, not conceal.