Key Takeaways
- Iowa uses designated agency, allowing brokerages to designate specific agents to represent buyers and sellers within the same firm
- Single agency means representing only one party (buyer OR seller) in a transaction
- Dual agency requires written informed consent from both parties before proceeding
- Iowa strongly emphasizes consumer protection through mandatory agency disclosures
- Licensees owe fiduciary duties to clients including loyalty, confidentiality, obedience, disclosure, accounting, and reasonable care
Iowa Agency Relationships
Iowa law defines the types of agency relationships that real estate licensees may have with consumers. Iowa uses designated agency as a key feature of its agency law.
Types of Agency Relationships
Single Agency
A single agent is a licensee who represents only one party in a sale:
| Single Agent Role | Represents |
|---|---|
| Seller's agent | Seller only |
| Buyer's agent | Buyer only |
Single agent duties include:
- Undivided loyalty to the client
- Confidentiality of client information
- Full disclosure of material facts to client
- Obedience to lawful instructions
- Accounting for all funds
- Reasonable care and diligence
Designated Agency (Iowa's Key Feature)
Designated agency allows a brokerage to:
- Designate one agent to represent the seller
- Designate another agent to represent the buyer
- Both agents work at the same brokerage
- Each agent provides full representation to their client
| Advantage | Description |
|---|---|
| Full representation | Each party gets a dedicated agent |
| Confidentiality maintained | Agents don't share client confidences |
| In-house transactions | Brokerage can handle both sides |
| Consumer protection | Better than limited dual agency |
Key Point: In designated agency, the broker (company) is a dual agent, but the individual salespersons are single agents for their respective clients.
Dual Agency
Dual agency occurs when one licensee represents both buyer and seller:
| Requirement | Description |
|---|---|
| Written consent | Both parties must consent in writing |
| Disclosure | Full disclosure of the dual relationship |
| Confidentiality limits | Cannot disclose price/terms one party will accept |
| Neutral position | Must remain impartial to both parties |
Warning: Dual agency significantly limits what an agent can do for either party. Iowa encourages designated agency as an alternative.
Fiduciary Duties in Iowa
Iowa licensees owe specific duties to their clients (fiduciary duties) and general duties to all parties.
Duties to Clients (Fiduciary)
| Duty | Description |
|---|---|
| Loyalty | Put client's interests above your own |
| Confidentiality | Protect client's private information |
| Obedience | Follow client's lawful instructions |
| Disclosure | Inform client of all material information |
| Accounting | Account for all money and documents |
| Reasonable Care | Use skill and diligence in representation |
Memory Aid: Remember "LOCDAR" - Loyalty, Obedience, Confidentiality, Disclosure, Accounting, Reasonable care.
Duties to ALL Parties
Iowa law imposes certain duties on all licensees to all parties in a transaction:
| Duty | Description |
|---|---|
| Honesty | Deal honestly with all parties |
| Material facts | Disclose known material facts |
| Fair dealing | Treat all parties fairly |
| Present offers | Present all written offers promptly |
| No misrepresentation | Never misrepresent material facts |
Subagency
Subagency occurs when a cooperating broker represents the seller through the listing broker:
| Concept | Description |
|---|---|
| Definition | Cooperating broker works for seller through listing broker |
| Common use | Less common today with buyer agency |
| Disclosure | Must be disclosed to all parties |
| Duties | Subagent owes duties to seller, fairness to buyer |
Exam Tip: Iowa has moved away from automatic subagency toward buyer agency and designated agency for better consumer protection.
What is designated agency in Iowa?
Which memory aid helps remember fiduciary duties in Iowa?