Final answer:
Undisclosed dual agency in real estate can lead to severe consequences for the broker, including losing their license, losing the commission, and being liable for damages.
Step-by-step explanation:
Undisclosed dual agency refers to a situation where a real estate broker represents both the buyer and the seller in a transaction without disclosing this fact to both parties. This practice is generally considered unethical and may result in legal consequences for the broker.
In this case, broker Joan Jones may be held liable for damages due to the potential conflicts of interest and breach of her fiduciary duty to both parties. Additionally, she may lose her license and any commission earned from the transaction.
Therefore, the correct answer is 4) all of the above. Joan Jones may face losing her license, losing the commission, and being liable for damages.
In real estate, a dual agency situation arises when a single real estate broker or agent represents both the buyer and seller in the same transaction. When a dual agency is not disclosed and agreed to in writing by all parties, it can lead to several significant consequences for the broker. Joan Jones, as the broker in this scenario, may face consequences such as:
Losing her license due to a breach of state real estate commission rules and regulations.
Losing the commission on the sale, as it may be rescinded if the transaction is found to have been completed under misrepresented circumstances.
Being liable for damages which could include compensatory damages to the client for any losses incurred from the non-disclosure of the dual agency.
Therefore, the most complete answer to the student's question would be option 4) all of the above.