Broker Patricia at Cape Cod Realty has two salespersons: Tom, who represents seller Diana on a Hyannis listing, and Lisa, who represents buyer Carlos who wants to purchase Diana's property. Broker Patricia designates Tom to represent only Diana and Lisa to represent only Carlos, and discloses this arrangement to both parties in writing. What type of agency relationship is this under Massachusetts law?
Correct Answer
D) Designated agency, because the broker has assigned separate licensees to represent each party
Under 254 CMR 3.00, designated agency is the arrangement in which a broker designates one licensee within the brokerage to represent the seller and a different licensee to represent the buyer in the same transaction. Each designated agent owes full fiduciary duties to their respective client. This arrangement is permitted in Massachusetts provided that both parties receive written disclosure and consent. It allows both parties to receive representation without the conflicts inherent in full dual agency.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
The legal obligation to reveal information that could affect a party's decision to enter into or the terms of a real estate transaction.
The extent of power and actions an agent is authorized to perform on behalf of the principal, as defined by the agency agreement.
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