Broker Gwen operates Gwen's Realty in Owensboro, Kentucky. She personally lists seller Bob's home and also agrees to represent buyer Ann, who is interested in the same property. Gwen does NOT designate separate agents for Bob and Ann — she personally handles both sides of the transaction. Under Kentucky law, which of the following correctly describes this arrangement and its disclosure requirements?
Correct Answer
B) This is dual agency; Gwen must disclose the dual agency relationship and obtain informed consent from both Bob and Ann
When Gwen personally represents both the seller (Bob) and the buyer (Ann) in the same transaction without designating separate agents, she is acting as a dual agent. Under Kentucky law and 201 KAR 11:121, dual agency is permissible but requires full disclosure of the dual agency relationship to both parties and their informed written consent. Gwen's fiduciary duties are limited in this arrangement, and both parties must understand and agree to the arrangement.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
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