Concepts Definitions
nnnnSecret Profit: An undisclosed financial gain made by an agent from a transaction on behalf of a principal, without the principal’s knowledge or consent. This is a serious breach of an agent’s fiduciary duty.
nnnnFiduciary Duty: A legal obligation requiring a party, such as a real estate agent, to act in a position of trust and confidence, managing money, property, or other valuable assets on behalf of another party (the principal) with utmost loyalty, honesty, and truthfulness.
nnnnLoyalty: A core fiduciary duty requiring an agent to place the client’s needs, interests, and goals far ahead of their own personal interests.
nnnnDisclosure of Material Facts: The agent’s duty to fully inform the principal of all significant facts that might affect the principal’s decision in a transaction.
nnnnDivided Agency: This occurs when an agent represents multiple parties in a transaction (e.g., both the buyer and seller) without the explicit knowledge and consent of all parties involved. While a violation, it specifically relates to dual representation, not an agent making an undisclosed profit by acting against the client’s direct interest as described in the question.
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