Agent Greg at Fairfax Realty in Virginia has a buyer representation agreement with client Tara. Tara makes an offer on a property listed by a different brokerage. During the negotiation, the listing agent leaves Fairfax Realty and joins Greg's brokerage, Fairfax Realty, bringing the listing with her. Now both the listing and Tara's buyer representation are held by Fairfax Realty. Neither Tara nor the seller has signed a dual agency consent form. What is the most accurate description of the situation?
Correct Answer
B) An undisclosed dual agency has been created, and the brokerage must immediately obtain written consent from both parties or restructure the representation
When the listing agent joined Fairfax Realty, the brokerage became the agent for both the buyer (Tara) and the seller in the same transaction — creating an in-house dual agency situation at the brokerage level. Under Virginia law (Va. Code § 54.1-2139), dual agency requires written informed consent from all parties. Because no consent has been obtained, the brokerage is currently in an undisclosed dual agency, which is a violation. The brokerage must immediately disclose the situation, obtain written consent from both Tara and the seller, or restructure the representation (e.g., through designated agency if the brokerage has that policy, or by referring one party to another brokerage).
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
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.
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