Lakewood Realty in Grand Forks has a listing for a property owned by the Johnsons. Salesperson Anna at Lakewood Realty is the listing agent. Salesperson Ben, also at Lakewood Realty, has been working with buyer Derek. Derek wants to make an offer on the Johnsons' property. The broker designates Anna to represent the Johnsons and Ben to represent Derek. Which of the following statements best describes the legal status of this arrangement under North Dakota law?
Correct Answer
B) This is permissible designated agency, and each designated agent owes full fiduciary duties only to their respective client.
Under North Dakota Administrative Code Title 70, designated agency is a permissible arrangement where the supervising broker assigns separate licensees within the same firm to represent each party. When properly disclosed and consented to in writing, Anna owes full fiduciary duties exclusively to the Johnsons, and Ben owes full fiduciary duties exclusively to Derek. This is the key advantage of designated agency over dual agency — each client receives undivided loyalty from their designated agent.
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