Tennessee affiliate broker Jason works at Blue Ridge Realty. He represents buyer clients who want to purchase a home listed by a different affiliate broker, Sandra, at the same firm. The Broker-in-Charge, without consulting either Jason or Sandra, decides to handle the transaction as a dual agency and has both clients sign a dual agency consent form. Jason believes his buyer clients' interests would be better served under designated agency. Under Tennessee law, which statement is most accurate?

Correct Answer

D) Designated agency would have been the preferred alternative, but the executed dual agency consent forms make the dual agency arrangement lawful

Under Tenn. Code Ann. § 62-13-401 et seq., Tennessee permits dual agency when both the buyer and seller provide written informed consent. While designated agency is often preferred because it avoids the conflicts inherent in dual agency, the law does not require designated agency to be used. Once both clients have signed valid dual agency consent forms, the dual agency arrangement is lawful. Jason's personal preference for designated agency does not override the clients' informed written consent to dual agency.