Broker A had a property listed two years ago. The sellers ultimately decided not to sell at that time, and the listing expired.
Two years later, the property is for sale with Broker B. Broker A has a buyer that is interested in making an offer on the property. Broker A knows that Mrs. Seller is ill and this might be helpful in negotiations for his buyer. However, the knowledge was obtained while Broker A had the property listed for sale two years ago.
Can Broker A disclose the information to the buyer?
After termination of an agency relationship, the fiduciary duty is ended. See Coldwell Banker Commercial v. Camelback Office Park, 156 Ariz. 226, 231, 751 P.2d 542, 547 (1988). However, pursuant to the Restatement (Second) of Agency: 1 §396 Using Confidential Information after Termination of Agency:
Unless otherwise agreed, after the termination of the agency, the agent:
- (d) has a duty to the principal not to take advantage of a still subsisting confidential relation created during the prior agency relationship.
Therefore, Broker A’s continuing duty of confidentiality to the seller after the listing expired would preclude him from disclosing the confidential information about Mrs. Seller even after termination of the agency relationship, unless Broker A obtains Mrs. Seller’s consent.