Fiduciary Duties

Fiduciary Duties in Texas — OLD CAR ## The Six Fiduciary Duties When an agent represents a client, that agent owes the highest standard of care and loyalty recognized by law — the fiduciary standard. Texas real estate practice recognizes six core fiduciary duties, memorized with the acronym OLD CAR: O — Obedience: Follow all lawful instructions of the principal. The agent must act on the client's directions even if the agent personally disagrees. The caveat is critical: the instruction must be lawful. An agent is never required (and is not permitted) to follow instructions that would violate TRELA, TREC rules, or fair housing law. L — Loyalty: Place the client's interests above all others, including the agent's own financial interest. A classic loyalty violation: an agent steers a buyer toward a property where the agent earns a larger commission, rather than the property that best serves the buyer's needs. D — Disclosure: Proactively tell the client all information that is material to the transaction and that the client would want to know. This includes known defects, zoning changes, planned development nearby, and information about the other party's situation that could affect negotiating position. C — Confidentiality: Protect the client's private information — financial limits, personal motivation, willingness to negotiate — both during and after the agency relationship. The duty of confidentiality survives the termination of the agency relationship. A former agent cannot disclose a client's confidential negotiating position to a competitor even years after the relationship ended. A — Accounting: Maintain accurate records of all funds and property belonging to the client. Account promptly for any money received. Do not commingle or convert client funds. This duty is…