Key Takeaways
- Arizona permits limited dual agency only with written informed consent from both parties
- In dual agency, the licensee cannot advocate for either party over the other
- Certain confidential information cannot be disclosed without written permission
- Both parties must sign a consent form acknowledging the limitations of dual agency
- Brokers may decline to offer dual agency in their office policies
Limited Dual Agency in Arizona
Arizona permits limited dual agency when a broker represents both the buyer and seller in the same transaction, but strict requirements apply.
What is Limited Dual Agency?
Limited dual agency occurs when:
- The same broker represents both buyer and seller
- Both parties have given written informed consent
- The licensee's advocacy is limited
"Limited" Means Limited
In dual agency, the broker cannot:
- Advocate for one party over the other
- Share one party's confidential information with the other
- Recommend a price or terms that favor one party
- Advise either party on negotiation strategies
Requirements for Dual Agency
Written Consent
Both parties must provide written informed consent that includes:
| Element | Description |
|---|---|
| Identity of parties | Names of buyer and seller |
| Acknowledgment | Both understand the limitations |
| Signature | Both parties sign the consent |
| Date | When consent was given |
Disclosure of Limitations
The consent form must explain:
- The broker will not be able to advocate for either party
- Confidential information will be protected
- The broker will facilitate the transaction neutrally
- Either party may choose separate representation instead
Confidential Information
What Cannot Be Disclosed (Without Permission)
| From Seller | From Buyer |
|---|---|
| Lowest acceptable price | Highest price willing to pay |
| Motivation to sell | Motivation to buy |
| Willingness to accept terms | Financial qualifications beyond what's disclosed |
| Urgency to close | Urgency to close |
What Must Still Be Disclosed
Even in dual agency, the licensee must disclose:
- Material facts about property condition
- Known defects
- Information required by law
- Facts that could affect the transaction
Comparison: Single Agency vs. Dual Agency
| Aspect | Single Agency | Dual Agency |
|---|---|---|
| Representation | One party only | Both parties |
| Advocacy | Full advocacy | Limited/neutral |
| Confidentiality | Protected from other party | Protected from both |
| Negotiation advice | Can advise on strategy | Cannot advise |
| Price recommendations | Can recommend | Cannot recommend |
Best Practices for Dual Agency
- Obtain consent early - Before any confidential information is shared
- Use proper forms - AAR provides standard consent forms
- Document thoroughly - Keep records of all disclosures
- Remain neutral - Don't favor either party
- Consider declining - If advocacy is needed, suggest separate representation
Broker Office Policies
Brokers may establish policies regarding dual agency:
| Policy Option | Description |
|---|---|
| Permit dual agency | Allow with proper consent |
| Prohibit dual agency | Never practice dual agency |
| Case-by-case | Evaluate each situation |
If a broker prohibits dual agency and a conflict arises, one party must find different representation.
In-House Transactions
When buyer and seller clients are both with the same brokerage:
Options Available
- Dual Agency - Broker represents both (with consent)
- Separate Salespersons - Different agents for each party
- Release One Client - One party seeks different representation
Note: Even with different salespersons, if they're in the same office, the broker may still have dual agency obligations depending on the situation.
What type of consent is required for dual agency in Arizona?
In a dual agency situation, a broker can disclose: