What must be disclosed to clients regarding any potential conflicts of interest?

Clients must be informed about any potential conflicts of interest that may affect their decisions, and this disclosure is required for both clients involved in a transaction. The principle here is rooted in transparency and ethical conduct within agency practices. When an agent represents multiple clients, any conflict of interest can influence how the agent acts or advocates on behalf of each client.

By disclosing these conflicts to both parties, the agent ensures that clients are fully informed and can make decisions that are in their best interest. This practice upholds the integrity of the agency relationship and maintains trust between the agent and clients. It also helps to avoid situations where one party might feel disadvantaged or misled, which can lead to disputes or legal issues. Thus, it is essential that all potential conflicts are communicated openly to both clients to foster a fair and equitable transaction.