Limited Duty of Care is owed to which party?

• A. Clients
• B. Customers
• C. Lenders
• D. Regulators

Answer: (B)

In real estate practice, the level of duty you owe depends on your relationship with the party. When you’re representing someone as a client, you have strong fiduciary duties. But with a party who isn’t your client—someone you’re assisting as a customer—you owe a limited duty of care. That means you must deal with the customer honestly and fairly and disclose known material facts about the property or transaction. You’re not obligated to advocate for the customer’s interests in the same way you would for a client, nor to keep client-confidential information, in most cases, private from the customer.

This limited duty is owed to the customer because they’re the non-represented party in the transaction. Lenders and regulators aren’t in that representative relationship, so they aren’t the recipients of this duty in the typical real estate practice sense.