Agency Relationships and Disclosure Obligations
Who represents whom
Vermont divides the world into clients (represented) and customers (not represented). A licensee working with a buyer without a written buyer agency agreement owes honesty and fairness but not full fiduciary loyalty. Fiduciary duties - obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care - flow to the client only.
The disclosure obligation
Disclose the nature of the relationship early and in writing: at first substantial contact, and certainly before confidential information is shared or an agreement is signed. Vermont recognizes seller agency, buyer agency, and designated agency, in which one brokerage represents both sides through different licensees, each loyal to their own client while the firm protects the confidences of both.
Dual agency
True dual agency - one licensee representing both parties in the same transaction - requires informed written consent from both parties and is disfavored. Designated agency, permitted with proper written disclosure, is not the same thing. A common exam trap is a fact pattern where a single agent "represents both" with no consent.
Other disclosures
A licensee buying or selling on their own account, a family or business relationship with a party, outside compensation or a referral fee, and any interest in a service provider (lender, inspector, title company) must be disclosed. Confidential information learned in an agency relationship survives the closing.
Traps
- Working with a buyer for weeks creates no buyer agency without a written agreement.
- Confidentiality never requires concealing a material defect the seller must disclose.
- A customer is still owed truthful answers about the property.
Rule of thumb
No paper, no agency - and the paper should be signed before the buyer reveals their top number.