Broker Linda represents seller Harold in listing his home in Colorado. During the listing period, Linda's buyer client from a different transaction, Amy, expresses strong interest in Harold's property. Linda wants to represent both Harold and Amy in this transaction. Harold consents in writing to Linda acting as a dual agent. Amy, however, refuses to sign the dual agency consent form, insisting she wants Linda as her exclusive buyer's agent. What is the correct outcome under Colorado law?
Correct Answer
A) Linda cannot proceed as a dual agent; she must choose to represent either Harold or Amy as a single agent, or withdraw from one representation
Under C.R.S. § 12-10-403, dual agency in Colorado requires informed written consent from BOTH parties — not just one. Because Amy refuses to sign the dual agency consent form, Linda cannot proceed as a dual agent. Linda faces a genuine conflict: she cannot simultaneously fulfill her fiduciary duty of exclusive loyalty to Harold as his seller's agent while also fulfilling her fiduciary duty of exclusive loyalty to Amy as her buyer's agent. The only permissible options are: (1) Linda withdraws from representing Amy and continues as Harold's listing agent only, (2) Linda withdraws from the listing and represents only Amy, or (3) Linda becomes a transaction broker for both with both parties' consent.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
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