Broker Chen's firm lists a property for seller Davis. Salesperson Rivera, who works for Broker Chen's firm, is working with buyer Patel, who wants to purchase Davis's property. Broker Chen's firm has not implemented a designated agency policy. Which of the following best describes the agency status of this situation under New Jersey law?
Correct Answer
D) The entire brokerage firm is in a dual agency relationship with both Davis and Patel
Under New Jersey agency law, when a salesperson affiliated with a brokerage represents a buyer who wants to purchase a property listed by the same brokerage, the entire brokerage firm — including the broker and all affiliated licensees — is considered to be in a dual agency relationship. Because the firm has not adopted a designated agency policy, there is no mechanism to separate the representation, and the firm owes duties to both seller Davis and buyer Patel simultaneously. Written consent from both parties is required.
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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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