Fiduciary Duty in Florida Real Estate: What Every Future Agent Must Know

Understanding fiduciary duty is not just an academic requirement for aspiring real estate professionals in Florida—it's a cornerstone of ethical and legal practice. As a licensed agent, you will be trusted to represent clients in high-stakes transactions involving significant financial and emotional decisions. This level of trust comes with a set of serious responsibilities known as fiduciary duties.

Fiduciary duties are one of the key legal concepts covered in Florida’s pre-licensing real estate courses, and they are essential for both passing the licensing exam and succeeding in the field. In this guide, we’ll break down what fiduciary duty means, how it applies to different agency relationships in Florida, and what happens when it's breached.

What Is Fiduciary Duty in Real Estate?

In real estate, a fiduciary duty is the legal obligation an agent has to act in the best interests of their client—also known as the principal. It’s a relationship built on trust, confidence, and loyalty. The fiduciary duty goes beyond general professional responsibilities; it imposes higher ethical and legal standards that guide how an agent must behave.

These duties are not optional. They are defined by Florida real estate law and are enforceable through legal and regulatory channels. Violations can lead to serious consequences, including loss of license, civil liability, and reputational damage.

The Six Fiduciary Duties Every Florida Agent Should Know

When an agent enters into a single agent relationship in Florida, they owe their client six specific fiduciary duties:

1. Loyalty
The agent must place the client’s interests above all others, including their own. For example, an agent cannot suggest a property simply to increase their commission if it’s not in the client’s best interest.
2. Obedience

The agent must follow all lawful instructions given by the client. If a seller wants to reject a full-price offer for personal reasons, the agent must comply, even if it defies conventional wisdom.

3. Disclosure

The agent must disclose all known material facts that could affect the client's decision. This includes anything that might impact the value or desirability of the property.

4. Confidentiality

Any personal or financial information shared by the client must be kept private—even after the transaction ends. Confidentiality is ongoing and critical to professional trust.

5. Accounting

The agent must account for all funds and property entrusted to them, such as earnest money deposits or keys. Accurate records must be maintained at all times.

6. Reasonable Care and Diligence

The agent must use their knowledge and skills to competently represent the client. This includes proper market analysis, contract management, and understanding of applicable laws.

Brokerage Relationships and Fiduciary Duties in Florida

Florida is unique in that it recognizes three types of brokerage relationships, each with different levels of obligation:

1. Single Agent

This relationship carries full fiduciary duties and represents the highest level of trust and accountability between the agent and the client. This is the only arrangement in Florida real estate where all six fiduciary duties apply.

2. Transaction Broker

This is the default relationship in Florida unless otherwise specified. In this role, the agent provides limited representation to both parties in a transaction but does not owe fiduciary duties. Instead, they must deal honestly and fairly, account for funds, and disclose known facts.

3. No Brokerage Relationship

In this case, the agent performs administrative functions but does not represent the client. There are no fiduciary duties, but the agent must still provide limited statutory duties such as honesty, disclosure of known facts, and accounting for funds.

Knowing which relationship applies—and making proper disclosures—is vital to staying compliant and protecting both yourself and your client.

Real-Life Scenarios: Fiduciary Duty in Practice

Let’s consider a few examples that bring this concept to life:

• Loyalty vs. Self-Interest: An agent learns of a buyer’s higher budget and considers using that information to negotiate a better deal with another client. Doing so would breach confidentiality and loyalty.
• Obedience and Ethics: A seller asks the agent to hide a roof leak from potential buyers. While the agent must obey lawful instructions, they are also bound to disclose material facts. In this case, following the seller’s directive would violate disclosure laws.
• Confidentiality After Closing: A past client decides to list a new property, but a competing buyer asks about their previous transaction. The agent must keep all confidential details private—even years later.

These scenarios are not hypothetical. They reflect the real ethical decisions agents face in Florida’s dynamic market.

What Happens If a Fiduciary Duty Is Breached?

A breach of fiduciary duty can lead to significant legal and professional consequences, including:

• Civil lawsuits for damages caused by the agent’s actions or omissions.
• Administrative penalties from the Florida Department of Business and Professional Regulation (DBPR), including suspension or revocation of license.
• Loss of trust and reputation, which can end a real estate career.

To avoid breaches, agents should maintain clear documentation, use written disclosures, and continue their professional education. When in doubt, consult a supervising broker or legal counsel.