In a sub-agency relationship, the sub-agent (Kip) is engaged by the listing broker (Sheila) and acts as an agent on behalf of the seller (May). Therefore, Kip owes the same fiduciary duties, including the duty of loyalty, to the seller (May) as the listing broker does. As an agent of Sheila, Kip also owes loyalty to her. The buyer, Charlie, is a customer, not a client. While Kip must treat Charlie with honesty and fairness, he does not owe him the fiduciary duty of loyalty. Kip's primary allegiance is to the seller's interests, which are represented by Sheila and ultimately belong to May.

A. Charlie is a customer, not a client; a sub-agent owes a customer honesty and fair dealing, not the fiduciary duty of loyalty.

B. This is incomplete. While Kip owes loyalty to May (the seller), he is also an agent of Sheila (the listing broker) and owes her loyalty as well.

C. Loyalty is not owed to Charlie, the buyer customer. This option incorrectly establishes a fiduciary relationship with the customer.

1. Maryland Real Estate Commission, "Understanding Whom Real Estate Agents Represent" Disclosure Form (Required under Business Occupations and Professions Article, §17-322, Annotated Code of Maryland). The form specifies that a "Subagent" is an agent who "works for the seller" and "owes fiduciary duties to the seller." This establishes the duty to May. As an agent of the listing broker (Sheila), the sub-agent operates under her authority, creating a duty to her as well.

2. Code of Maryland Regulations (COMAR) 09.11.02.01(C). This section of the Code of Ethics states, "In accepting employment as an agent, a licensee shall protect and promote the interests of the client." In this scenario, the ultimate client is the seller, May. The sub-agent (Kip) shares this obligation with the listing agent (Sheila).

3. Jacobus, C. J. (2022). Real Estate Principles (14th ed.). University of Houston. Chapter 10, "Agency," explains that a subagent is an agent of the listing broker and owes fiduciary duties to the seller. The text clarifies that the subagent's loyalty is to the seller-client, not the buyer-customer. The relationship is defined as the subagent working for the seller through the listing broker.