A Massachusetts buyer, Kevin, signed a buyer representation agreement with salesperson Amy at Coastal Realty. Kevin finds a property he loves that is listed by a different salesperson, Bob, who also works at Coastal Realty. The broker at Coastal Realty decides to handle this as a dual agency with both parties' written consent rather than designating Amy and Bob as separate representatives. Under Massachusetts law, which of the following statements about this arrangement is most accurate?
Correct Answer
D) The arrangement is valid as dual agency with written consent, but the brokerage's duties to each party are limited compared to exclusive representation
Under 254 CMR 3.00, when a brokerage represents both a buyer and a seller in the same transaction, this is dual agency at the brokerage level. With informed written consent from both Kevin and the seller, the dual agency arrangement is valid. However, the brokerage's duties to each party are limited: it cannot fully advocate for either party, cannot disclose confidential negotiating information of one party to the other, and cannot advise either party on price strategy in a way that disadvantages the other.
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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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