Affiliate broker Nina listed seller Paul's Brentwood home and has been showing it to various buyers. Buyer client Leo, who is represented by Nina's colleague at the same firm, affiliate broker Omar, submits an offer. The broker-in-charge has not formally designated Omar as Leo's agent or Nina as Paul's agent under a designated agency arrangement, and no dual agency consent forms have been signed. Under Tennessee law, how should this in-house transaction be characterized?
Correct Answer
A) As a potentially unauthorized dual agency situation requiring immediate written consent from both parties before proceeding
When two affiliate brokers from the same firm are involved on opposite sides of a transaction without a formal designated agency assignment and without dual agency consent, the firm is effectively acting as a dual agent without authorization. Under Tenn. Code Ann. § 62-13-401 et seq., the broker-in-charge must either formally establish designated agency (with proper client disclosure and consent) or obtain written dual agency consent from both parties before the transaction can proceed lawfully.
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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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