Oregon 30-Hour Real Estate Law Practice Test

After closing, what fiduciary duty is Donna demonstrating by ensuring her client has all transaction paperwork?

1. The duty of confidentiality

2. The duty of loyalty

3. The duty of accounting

4. The duty of competence

The correct answer is: The duty of accounting

In the context of fiduciary duties in real estate transactions, ensuring that a client has all transaction paperwork exemplifies the duty of accounting. This duty requires an agent to provide clients with a complete and accurate account of all documents and funds involved in the transaction. By ensuring her client receives all necessary paperwork post-closing, Donna is fulfilling her obligation to keep her client informed about the financial aspects and documentation associated with their transaction. The duty of accounting encompasses not just the handling of funds, but also the proper management and dissemination of important documents that serve as a record of the transaction. This is crucial because these documents can include contracts, disclosures, and closing statements, which the client may need for future references or in case of disputes. Other duties, while important, do not directly relate to the act of providing transaction paperwork. For instance, the duty of confidentiality involves protecting the client’s private information, the duty of loyalty focuses on acting in the client's best interests, and the duty of competence relates to the agent’s ability and knowledge to effectively handle the transaction. However, these duties do not specifically address the importance of ensuring that the client receives all pertinent documentation after closing, which is a clear demonstration of the duty of accounting.