What is known as the special relationship of trust between an agent and their principal?

The special relationship of trust between an agent and their principal is known as a fiduciary relationship. This concept is crucial in real estate and other professional settings because it establishes a legal and ethical standard that demands the agent to act in the best interests of the principal.

In a fiduciary relationship, the agent is obligated to put the principal's interests above their own, maintain confidentiality, provide full disclosure of material facts, and manage the principal's assets prudently. This level of trust is essential for ensuring that the agent acts with loyalty and good faith, which is vital in transactions that involve significant financial investments and personal interests.

The agency relationship is a broader term that encompasses the fiduciary relationship but does not specifically highlight the trust and ethical standards involved. A partnership and a business relationship do not inherently include the same level of trust and loyalty required in a fiduciary context, as these terms may involve shared interests or joint ventures with different obligations and responsibilities. Thus, the definition of a fiduciary relationship is key to understanding the responsibilities and duties of agents in real estate.