Broker Diane's firm in Minneapolis has a policy of always acting as a dual agent when both sides of a transaction are handled within the firm. A buyer, James, has never been informed of this policy. When James signs a buyer representation agreement with one of Diane's agents, he is not given a dual agency disclosure. The seller in the transaction is also represented by Diane's firm. Under Minnesota law, which of the following best describes the legal consequence of this situation?
Correct Answer
B) Diane's firm has violated Minnesota law by failing to obtain James's informed written consent to dual agency before or at the time the dual agency relationship was established
Under Minn. Stat. Ch. 82, dual agency in Minnesota requires informed written consent from both the buyer and the seller before or at the time the dual agency relationship is created. Diane's firm failed to disclose the dual agency arrangement and obtain James's informed written consent. This is a violation of Minnesota license law. A broker's internal policy does not substitute for the legally required informed written consent of each party.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
The fiduciary obligations owed by a listing agent to the seller, including marketing the property, presenting all offers, and protecting the seller's confidential information.
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