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Home » Hondros Alumni Association » Kristin Rosan Blog » Archive » Duty of Confidentiality

Duty of Confidentiality

As an attorney it is drilled into law school studies the attorney-client privilege.  Such has been the subject of sensational courtroom dramas and real life litigation.  Ohio real estate licensees too have similar obligations of confidentiality to their clients.

Confidential Information is all information that the client directs to be kept confidential, that if disclosed would have an adverse effect on the client’s position  or that is required by law to be kept confidential.  However, the a licensee may disclose confidential if required to do so by law (i.e. court subpoena).  Note: Information concerning latent defects is never considered confidential information. Licensees must safeguard a client’s confidential information even from other licensees within the same brokerage that do not represent the client.

In an October 2015 case before the Ohio Real Estate Commission, an agent practicing as a dual agent in a transaction was sanctioned for failing to safeguard his/her client’s confidential information.  The property that was the subject of the transaction was a new build and not secured.  The agent left a copy of the buyer’s purchase agreement in the property for the buyers to pick up at a later time.  The Commission found that the agent violated R.C. 4735.61(I), which requires a licensee to use best efforts to keep confidential all a client’s confidential information. The Commission imposed a $500.00 fine and 6 hours of continuing education as the sanction for the agent’s conduct.

Beyond regulatory sanctions, a licensee faces civil liability of a breach of confidential information causes a client damages.  However, despite an agent’s best efforts sometimes confidential information is breached.  License law provides if a Broker determines that confidential information has been compromised by a disclosure in a dual agency relationship or as a result of a brokerage or agent failure, the broker must notify both clients in writing and offer to resign.  Further, the  licensee must not use such confidential information to benefit his/her client.

At the conclusion of a transaction, the agent’s duty of confidentiality remains.  There are however exceptions (aren’t there always?).  An agent may disclose confidential if:

  • The client permits disclosure in writing
  • Disclosure is required by law
  • Information becomes public, source other than licensee
  • Disclosure is necessary to prevent a crime
  • Disclosure is necessary to defend the agent/brokerage against accusations of misconduct or to defend a commission claim

The Brokerage Company Policy must contain a section devoted to how the brokerage ensures the protection of confidential information.  In 2013, Ohio Administrative Law was amended to also require brokerages to include in their Company Policy procedures to protect confidential information on websites, including social networking sites and blogs.

 

Although an agent’s duty of confidentiality is not the subject of Hollywood dramas, it is still a critical component of any agency relationship.  So when in doubt …. Shhhhhh.

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