2.1 Nevada Agency Relationships
Key Takeaways
- The "Duties Owed by a Nevada Real Estate Licensee" form (Nevada Real Estate Division form 525) must be given before the licensee acts, to the client and to each unrepresented party
- NRS 645.252 lists six duties owed to every party; NRS 645.254 adds six client-only duties that cannot be waived
- Confidential client information must be protected for 1 year after revocation or termination of the brokerage agreement (NRS 645.254)
- The "should have known" standard imposes a duty to investigate visible red flags, not just a duty to repeat what the seller volunteered
- Disclosure of material facts is owed to ALL parties, but a client's motivation, finances, and bottom-line price are confidential and stay protected
Agency Relationships Under Nevada Law
Nevada agency law lives in NRS 645.252 (duties owed to every party) and NRS 645.254 (extra duties owed only to a represented client). A licensee becomes an agent when a written brokerage agreement is signed; until then the licensee may still owe the six general duties to a customer (an unrepresented party). On the exam, do not confuse a client (represented, signed brokerage agreement) with a customer (gets honesty and material-fact disclosure but no loyalty).
Single Agency vs. Brokerage Agency
| Relationship | Who is represented | Loyalty owed to |
|---|---|---|
| Seller's (listing) agent | Seller only | Seller |
| Buyer's agent | Buyer only | Buyer |
| Dual agent | Both parties | Neither exclusively |
In Nevada the brokerage is the agent. If two salespeople in the same brokerage represent opposite sides, the brokerage itself is in a dual-agency posture even though each agent has a single client.
The Six Duties Owed to ALL Parties (NRS 645.252)
These are owed in every transaction, to clients and customers alike:
- Disclose to each party any material and relevant facts the licensee knows or should have known.
- Exercise reasonable skill and care with all parties.
- Disclose to each party that the licensee is acting for more than one party (dual agency) before acting.
- Disclose, before signing a brokerage agreement, any conflict of interest known to the licensee.
- Account promptly for all money and property received.
- Comply with the Nevada Administrative Code (NAC 645) and applicable law.
Trap: "Honesty and good faith" is a duty owed to everyone, but loyalty is owed ONLY to a client. An exam stem describing a buyer's agent who must still be honest with the seller is testing this split.
Additional Duties Owed ONLY to a Client (NRS 645.254)
Once a brokerage agreement is signed, the licensee owes these six client-only duties:
| Client-only duty | What it means in practice |
|---|---|
| Exercise reasonable skill and care to carry out the client's terms | Meet listing/buyer-rep instructions |
| Present all offers as soon as practicable | Even low offers, even after one is accepted (unless told not to) |
| Disclose material facts about the client's financial ability | To the licensee's own client, in good faith |
| Advise the client to obtain expert advice | E.g., recommend an inspector, attorney, or tax pro |
| Account for all money and property received | Trust-account handling |
| Maintain confidential client information | For 1 year after the agreement ends |
The duties in 645.252 and 645.254 may not be waived. A client cannot sign away the licensee's duty of loyalty or confidentiality.
Confidentiality: the 1-Year Rule
Confidential information is anything that would harm the client's bargaining position if revealed — the client's bottom-line price, financial condition, motivation, or timeline. The duty survives termination of the relationship for 1 year. It ends sooner only if (a) a court orders disclosure, (b) the information becomes public knowledge through other means, or (c) the client gives written permission.
Material Fact vs. Confidential Information
| Item | Treatment |
|---|---|
| Cracked foundation the agent saw | Material fact — disclose to ALL parties |
| Roof leak the seller hid | Material fact — agent must disclose |
| Seller is divorcing and must sell fast | Confidential — do NOT volunteer |
| Buyer pre-approved up to $450,000 | Confidential to buyer's agent |
The Duties Owed Form (NRD Form 525)
Nevada requires the "Duties Owed by a Nevada Real Estate Licensee" form be given before the licensee acts. The licensee delivers it to (1) the person the licensee represents and (2) each unrepresented party in the transaction, before substantive discussions. Worked example: an agent listing a FSBO-style seller who is also showing the home to an unrepresented walk-in buyer must hand the Duties Owed form to BOTH the seller-client and the unrepresented buyer before talking specifics.
Signature Mechanics
The Duties Owed form must be signed by the licensee and acknowledged by the party for whom the licensee acts and by each unrepresented party who receives it. If an unrepresented party refuses to sign, the licensee should note the refusal and the date of delivery and keep the record; delivery, not the other party's signature, is what discharges the obligation. Brokers must retain agency-disclosure documents in transaction files for the period required by NAC 645.
How the Duties Map to Real Conduct
| Scenario | Correct action | Duty source |
|---|---|---|
| A second, higher offer arrives after the seller accepts a first offer | Present it to the seller promptly unless instructed otherwise | Present all offers (645.254) |
| The buyer-client asks about a tax consequence | Advise the client to consult a CPA or attorney | Advise to seek expert advice (645.254) |
| The agent earns a referral fee from a lender | Disclose it in writing and obtain consent | Disclose conflict / compensation (645.252-254) |
| Earnest money is received from the buyer | Deposit it per brokerage trust-account rules | Account for funds (645.252) |
Because these duties cannot be waived, a clause in a listing agreement purporting to release the broker from loyalty or confidentiality is void. The exam frequently offers a 'the client signed a waiver' answer to test whether you know waiver is impossible.
How long must a Nevada licensee maintain confidentiality of client information after the brokerage agreement is revoked or terminated?
A buyer's agent in Nevada is showing a listed home to the seller, who is unrepresented at an open house. Which duty does the agent still owe the seller?
Nevada applies which standard to a licensee's duty to disclose material facts?