Broker Olivia works for Front Range Realty. She has a signed seller agency agreement with seller Greg for his property in Boulder. Buyer Wendy, who has a signed buyer agency agreement with Olivia at the same brokerage, wants to make an offer on Greg's property. The employing broker is unavailable and has not designated separate brokers. Olivia attempts to represent both Greg and Wendy simultaneously in the same transaction. Which of the following best describes the legal problem with this arrangement under Colorado law?
Correct Answer
B) Olivia cannot represent both parties simultaneously because Colorado does not permit a single licensee to hold dual fiduciary obligations in the same transaction.
Under C.R.S. § 12-10-401 et seq., Colorado does not recognize traditional dual agency where a single licensee simultaneously holds full fiduciary obligations to both a buyer and a seller in the same transaction. The conflict is irreconcilable — Olivia cannot simultaneously advocate for Greg to get the highest price and for Wendy to pay the lowest price. The proper Colorado solution is designated agency (assigning separate brokers) or transitioning both parties to transaction brokerage with their informed consent. Proceeding as a dual agent is not a permitted option.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
In real estate, a client is someone to whom the agent owes fiduciary duties through an agency relationship, while a customer is a third party to whom the agent owes only honesty and fair dealing.
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