Iowa Real Estate Practice Exam

What is TRUE about a broker who doesn't charge a tenant a fee?

1. The broker can charge the landlord any amount

2. The broker cannot disclose rent negotiations

3. The broker's disclosure violated the duties to the tenant

4. The broker should charge the tenant a nominal fee

The correct answer is: The broker's disclosure violated the duties to the tenant

Choosing that a broker's disclosure violated the duties to the tenant highlights an important aspect of a broker's responsibilities. In general, brokers must act in the best interests of their clients, which includes maintaining confidentiality about negotiations and personal information unless otherwise permitted. If a broker does not charge a fee to a tenant, they may still have fiduciary duties towards the tenant, and any disclosures made without consent could jeopardize those duties. When a broker charges a fee, it often formalizes their role and the expectations established between the parties involved. However, not charging a fee does not absolve the broker from the responsibility to protect their client's interests, including the right to privacy regarding sensitive negotiation information. Thus, if the broker were to disclose information regarding rent negotiations without tenant consent, it could indeed be viewed as a violation of their professional duties to the tenant, leading to breaches of trust and potential legal complications. The other options do not embody the core responsibilities expected of a broker in this context. Charging the landlord any amount may not be an accurate reflection of their ethical obligations, while charging a nominal fee overlooks the idea of maintaining fiduciary duties. Overall, a thorough understanding of the permissible actions of a broker when not charging a tenant is vital to ensure ethical real estate