Salesperson Tom works for Metro Realty and represents buyer client Elena. Metro Realty also holds the listing for a property Elena wants to purchase, but the listing was taken by a different salesperson, Karen. The broker designates Tom to represent Elena and Karen to represent the seller. Elena signs the designated agency consent form. The seller, however, refuses to sign the designated agency consent form. What is the correct outcome under Massachusetts law?
Correct Answer
D) The transaction cannot proceed as designated agency without both parties' consent; the firm must either withdraw from one side or restructure the agency arrangement with both parties' agreement
Under 254 CMR 3.00, designated agency — like dual agency — requires the informed written consent of BOTH parties to proceed. The seller's refusal to consent means the designated agency arrangement cannot be implemented. Without both parties' consent, the firm faces a conflict: it cannot represent both the seller and Elena in the same transaction without proper authorization. The firm must either have one side withdraw (e.g., refer Elena to an outside buyer's agent) or find another arrangement that both parties agree to. Proceeding over the seller's objection would violate Massachusetts agency disclosure regulations.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
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