Property Management
A Washington property manager accepting a management fee in excess of what is agreed in the management agreement without the owner's knowledge is:
AAcceptable if the extra work justifies the fee
BIllegal conversion of owner funds and a breach of fiduciary duty✓ Correct
CPermitted if market rates have increased since the agreement was signed
DOnly a contract dispute with no license consequences
Explanation
Taking fees beyond those authorized in the management agreement without the owner's consent is conversion of owner funds and a serious breach of fiduciary duty. This can result in license suspension or revocation and personal liability.
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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.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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