Affiliate Broker Tennessee (TN PSI) National Practice Exam `

The fiduciary duty of disclosure is primarily owed to the licensee's clients. In the context of real estate, this means that when a licensee represents a buyer or seller, they have a legal and ethical obligation to provide their clients with all material facts and information that could affect the client's decision-making process regarding the transaction. This duty encompasses full transparency about any issues that may arise with the property, the terms of the transaction, and any conflicts of interest that may occur. This relationship is built on trust and the expectation that the licensee will put the interests of their clients ahead of their own. Clients rely on their licensee for guidance and depend on them to disclose pertinent information that could impact their decisions, which emphasizes the importance of loyalty and transparency within this professional relationship. While there may be obligations to disclose certain information to other parties or to adhere to regulations, the fiduciary duty, particularly concerning disclosure, is fundamentally directed towards ensuring that clients are fully informed to protect their best interests.