What is the relationship between a client and a licensee?

The correct answer highlights the fundamental nature of the relationship between a client and a licensee in real estate transactions, which is that of a principal and agent. In this context, the client (principal) engages the services of a licensee (agent) to represent their interests in a real estate transaction. The licensee has a fiduciary duty to act in the best interests of the client, which includes responsibilities such as loyalty, confidentiality, full disclosure, and accounting for all funds.

This principal-agent relationship is crucial because it establishes the legal and ethical obligations that the licensee has to the client, ensuring that the client's needs and objectives are prioritized throughout the process. The agent works on behalf of the principal, negotiating and advocating for their interests in dealings with third parties.

By contrast, the other choices represent different types of relationships that do not encapsulate the specific legal obligations and responsibilities inherent in a client-licensee scenario. For example, a landlord and tenant relationship is typically characterized by lease agreements and does not involve the same fiduciary duties. Similarly, while a buyer and seller relationship is essential in real estate transactions, it does not define the agency relationship where one party acts on behalf of another. An investor and property manager relationship also implies a management role rather