Final answer:
A real estate broker must disclose single agency to a non-client to maintain transparency and prevent conflicts of interest, ensuring legal and ethical standards. Such disclosures are mandated by state laws.
Step-by-step explanation:
A real estate broker is required to disclose single agency when engaging with a party for whom they are not acting as an agent. This is usually done to ensure transparency and to prevent conflicts of interest. In the context of real estate, single agency refers to a brokerage relationship where the broker represents only one party in a transaction, either the buyer or the seller. Disclosure of single agency is crucial in situations where the broker may have previously represented the other party in the past or may currently be representing other interests not aligned with the party they are currently assisting.
For instance, if a broker is showing properties to a buyer (while representing a seller in a single agency agreement), the broker must disclose the single agency relationship to the buyer to clarify their loyalty aligns with the seller. It is essential for maintaining legal and ethical standards in the real estate industry. These disclosures are typically mandated by state laws and regulations, which can vary, so knowing the local requirements is important for both brokers and clients.