2.2 Rhode Island Agency Relationships

Single Agency: The Designated Client Representative

Under Chapter 5-20.6 a Designated Client Representative (DCR) is an affiliated licensee appointed by the principal broker to represent only one party. The DCR owes the classic fiduciary duties — a useful mnemonic is OLD CAR: Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care and skill.

These duties run only to the client. A buyer's DCR, for example, owes the buyer loyalty and confidentiality but still owes the seller honesty.

Disclosed Dual Agency

Disclosed dual agency occurs when one licensee represents both buyer and seller in the same transaction. Rhode Island permits it, but only with written consent from both parties after full disclosure of the conflict.

The practical effect: a dual agent becomes a neutral facilitator on price and terms. They cannot tell the seller "the buyer would pay more" or tell the buyer "the seller would take less."

The Transaction Coordinator: In-House Split Representation

Where two different affiliated licensees of the same brokerage represent opposite parties, the principal broker (or designee) acts as the Transaction Coordinator. Each licensee remains a full DCR for their own party; the coordinator merely supervises and owes only two duties — protect confidential information and account for money. All parties must receive written notice that an inherent conflict of interest may exist because both agents share a broker.

Exam Tip: Two agents from the same firm on opposite sides is NOT dual agency in Rhode Island — it is a Transaction Coordinator arrangement with two separate DCRs. Dual agency is one licensee wearing both hats.

The Transaction Facilitator: Non-Agency

A Transaction Facilitator assists a party without representing them. They perform ministerial acts and owe honesty and accounting but no loyalty, advocacy, or fiduciary confidentiality going forward. This is the answer when a fact pattern says an agent is helping a customer but has expressly not entered a client relationship.

Client vs. Customer

Rhode Island, like most jurisdictions, distinguishes a client from a customer. A client has a representation relationship and is owed full fiduciary duties; a customer is merely served at arm's length and is owed only the universal duties of honesty and fair dealing. A buyer working with a seller's DCR is the seller's client and the buyer is the seller's customer — the DCR must be honest with the buyer but advocates only for the seller. Misreading which party is the client is a frequent source of wrong answers.

Duties Owed to ALL Parties

Regardless of which party a licensee represents — or whether they represent anyone — Chapter 5-20.6 imposes baseline duties to everyone in the transaction. These are the most-tested "trick" items because students confuse them with client-only fiduciary duties.

Owed only to the client (not to all parties): undivided loyalty, confidentiality of negotiating posture, advice on pricing strategy, and full disclosure of material facts to the client.

Exam Tip: "Honesty and fair dealing" is owed to all parties; "loyalty" and "confidentiality of negotiating strategy" are owed only to the client. If an answer choice lists loyalty as a universal duty, it is wrong.

Confidentiality and Its Exceptions

A DCR must protect the client's motivation, finances, acceptable terms, and anything the client asks to keep private. Confidentiality is not absolute — it yields when:

1. Disclosure is required by law (for example, a known material defect must still be disclosed).
2. The information becomes public knowledge through other means.
3. The client authorizes disclosure in writing.

Note the interaction: a client cannot use confidentiality to hide a known material defect. The duty to disclose material facts to other parties overrides confidentiality on physical-condition issues.

Personal Interest and Compensation Disclosure

A licensee must disclose, to all parties, when buying or selling for:

• Themselves
• A family member
• An entity in which the licensee holds a financial interest

Common Trap: A licensee who flips a property they own must disclose their ownership to the buyer even if the buyer never asks. Self-dealing without disclosure is a license violation.

How the Relationship Ends

A representation relationship terminates by completion of the transaction, expiration of the agreement's term, mutual rescission, or revocation by either party. Two duties, however, survive termination: the duty to account for any funds or documents, and the duty of confidentiality regarding information learned during the relationship. An agent whose listing has expired still may not reveal the former seller-client's lowest acceptable price.

Quick Comparison of the Four Statuses

Keep this table in mind: the exam loves to swap the duties column — for example, claiming a Transaction Facilitator owes "loyalty" or that a Transaction Coordinator owes "full fiduciary duties to both parties." Both statements are false.