Key Takeaways
- Dual agency occurs when one licensee represents both buyer and seller in the same transaction
- Maryland permits dual agency only with written informed consent from both parties using the Consent For Dual Agency form
- In dual agency, the broker designates intra-company agents for each party
- The dual agent cannot give undivided loyalty to either party due to potential conflicts
- Consent must be given before confidential information is shared
Dual Agency and Intra-Company Agency in Maryland
Maryland permits both dual agency and intra-company agency, but each has specific requirements and limitations.
When Dual Agency Arises
The possibility of dual agency arises when:
- The buyer's agent and seller's agent both work for the same real estate company
- The buyer is interested in property listed by that company
- A single licensee would represent both parties
The real estate broker or the broker's designee is called the "dual agent."
Important Understanding
Key Concept: Dual agents do not act exclusively in the interests of either the seller or buyer, and therefore cannot give undivided loyalty to either party. There may be a conflict of interest because the interests of the seller and buyer may be different or adverse.
Requirements for Dual Agency
- Written informed consent from both parties BEFORE acting as dual agent
- Consent For Dual Agency form must be signed by both parties
- If both parties consent, the dual agent assigns intra-company agents:
- One agent to represent the seller (seller's intra-company agent)
- Another agent to represent the buyer (buyer's intra-company agent)
Dual Agent Limitations
A dual agent:
- Cannot advocate for one party over the other
- Cannot disclose confidential information from one party to the other
- Must treat both parties honestly and fairly
- Acts as a neutral facilitator
- Cannot give undivided loyalty to either party
What a Dual Agent CANNOT Disclose
Without written permission, a dual agent cannot reveal:
| To Buyer | To Seller |
|---|---|
| Seller's lowest acceptable price | Buyer's highest offering price |
| Seller's motivation to sell | Buyer's motivation to buy |
| Seller's financial situation | Buyer's financial capability beyond qualification |
What a Dual Agent MUST Disclose
Even in dual agency, the licensee must disclose:
- Material facts about property condition
- Information required by law
- Known defects affecting value or safety
Intra-Company Agency
Intra-company agency is created when dual agency is consented to and the broker assigns separate agents.
How Intra-Company Agency Works
When both seller and buyer consent to dual agency:
- The dual agent assigns one agent as the seller's intra-company agent
- The dual agent assigns another agent as the buyer's intra-company agent
- Each intra-company agent represents only their assigned client
- The broker remains the dual agent supervising both
Key Rules for Intra-Company Agency
| Rule | Explanation |
|---|---|
| Separate representation | Different licensees represent each party |
| Full duties | Each intra-company agent owes duties to their assigned client |
| Confidentiality preserved | Agents keep client information confidential |
| Broker as dual agent | Principal broker is the dual agent |
| Written consent required | Consent For Dual Agency form signed |
Broker's Role in Dual Agency
The supervising broker as dual agent:
- Does NOT advocate for either party
- Assigns intra-company agents
- Ensures proper disclosures are made
- Maintains separation between the agents
- Supervises compliance with agency laws
Comparison: Dual Agency vs. Intra-Company Agency
| Aspect | Pure Dual Agency | Intra-Company Agency |
|---|---|---|
| When it occurs | Same agent for both | Different agents assigned |
| Created by | Single agent situation | Dual agency consent |
| Advocacy | Neither party | Through assigned agent |
| Confidentiality | Limited to both | Maintained by each agent |
| Common practice | Discouraged | More common approach |
Consent Requirements
Consent to dual agency must be obtained:
- BEFORE confidential information is shared
- In writing using the Consent For Dual Agency form
- Signed by both buyer and seller
When dual agency is consented to in Maryland, what must the broker do?
Why can a dual agent NOT give undivided loyalty to either party?
What form must be signed by both parties to consent to dual agency in Maryland?