When does a violation of fiduciary duties occur?

• A. Before listing, or entering into an agreement for representation, or before showing property
• B. After closing
• C. Only after signing the contract
• D. Only if the principal signs the disclosure

Answer: (A)

Fiduciary duties kick in as soon as you begin acting on behalf of a client in a real estate transaction. Because of that, a breach can occur even before formal listing, before entering into a representation agreement, or before showing a property. When you start engaging with the client or their property—even in the pre-appointment phase—you owe loyalty, confidentiality, and full disclosure of relevant facts. If you reveal confidential information, misrepresent who you represent, or step in with a conflict of interest before a contract is signed, you’re violating those duties. After closing, the relationship often ends, and while some duties like confidentiality may continue, the principal duties themselves aren’t triggered anew at that stage. The key point is that fiduciary obligations arise with the act of representing, not solely at or after signing a contract or after a deal closes.