Property Management
A Maine property manager who accepts a kickback from a repair contractor without the property owner's knowledge has breached the duty of:
AReasonable care
BAccounting
CLoyalty (undisclosed compensation is a breach of fiduciary duty)✓ Correct
DObedience
Explanation
Accepting undisclosed compensation (kickbacks) from vendors is a breach of the duty of loyalty and the duty of accounting. Property managers must disclose any compensation received from third parties.
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Key Terms to Know
Fiduciary Duty
The highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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