Oregon 30-Hour Real Estate Law Practice Test

Which fiduciary duty may extend even after closing a transaction?

1. The duty of loyalty

2. The duty of competence

3. The duty of accounting

4. The duty of confidentiality

The correct answer is: The duty of accounting

The duty of confidentiality is the fiduciary duty that may extend even after the closing of a transaction. This duty requires agents and brokers to protect their clients' confidential information, and it remains in effect beyond the completion of the transaction. Even after the sale is finalized, an agent must not disclose sensitive information about their client that could harm the client's interests or provide an advantage to others. In real estate transactions, this can include personal financial information, motivations for selling or buying, and any other private matters that the client shared in confidence. Maintaining this confidentiality is essential for fostering trust in the client-agent relationship and is a crucial aspect of professionalism in the real estate industry. While the duties of loyalty, competence, and accounting are important fiduciary responsibilities, they typically conclude with the finalization of the transaction. For instance, the duty of loyalty involves acting in the best interests of the client during the transaction, the duty of competence pertains to providing services with adequate skill and expertise, and the duty of accounting relates to the management and reporting of funds and property entrusted to the agent. Once the transaction is completed, these duties are generally considered fulfilled, but confidentiality continues to be ongoing and critical for protecting the client's interests long after the deal is closed.