In NS real estate practice, what is the key difference between a client and a customer?

• A. A client is represented by a licensee with fiduciary duties; a customer is not represented and the licensee owes no fiduciary duties to them.
• B. A client can only buy; a customer can only sell.
• C. A client pays commission upfront.
• D. A client cannot withdraw from a contract.

Answer: (A)

The key idea is that an agency relationship in NS real estate practice creates fiduciary duties when a licensee represents someone. A client is the party who hires the licensee to represent their interests in a transaction, and the licensee owes fiduciary duties to that client—loyalty, confidentiality, obedience to lawful instructions, full disclosure of relevant information, and proper handling and accounting for funds. In short, the licensee acts as the client’s advocate and must prioritize the client’s interests above others.

A customer, on the other hand, is someone the licensee assists without representing them or advocating for their interests. The licensee’s duties to a customer are limited to general honesty and fair dealing; fiduciary duties do not attach to the customer, and the licensee isn’t obligated to keep the customer’s information confidential in the same way or to act in the customer’s best interest. The licensee can still provide information and facilitate the process, but without the same level of representation and loyalty that exists for a client.