How does Common Law treat conflict of interest compared to Designated Agency?

In the context of Common Law and designated agency, it is recognized that conflicts of interest can extend beyond just the individual agent involved in a transaction. This perspective emphasizes the responsibility of the whole brokerage when it comes to potential conflicts that may arise.

When a brokerage is aware of a conflict of interest—whether it involves an agent’s personal interests or relationships that could impact their professional judgment—the duty of disclosure encompasses not just the individual agent but also the brokerage as a whole. This means that all relevant parties within the brokerage should be transparent about any conflicts that might affect the transaction or the clients involved. This principle is rooted in the ethics and professionalism that govern real estate practices, where full disclosure is necessary to maintain trust and integrity in the client-brokerage relationship.

In contrast, designated agency often focuses on the responsibilities of individual agents, which may lead to the assumption that only the agent must disclose conflicts. However, this doesn’t encompass the broader implications where the brokerage could also be accountable for potential conflicts. Therefore, stating that conflict of interest extends to the whole brokerage aligns correctly with the expectations and obligations under Common Law.