Key Takeaways
- Dual agency in Michigan requires written informed consent from both buyer and seller
- A dual agent cannot advocate for either party and must remain neutral
- Dual agents cannot disclose confidential information from one party to the other
- Michigan permits designated agency where different agents represent each party
- Brokers must have written policies regarding dual agency and designated agency
Dual Agency and Designated Agency in Michigan
Michigan permits both dual agency and designated agency with proper disclosures and consent.
Dual Agency
Dual agency occurs when a licensee represents both the buyer and seller in the same transaction.
Requirements for Dual Agency
- Written disclosure of dual agency relationship
- Informed consent from both parties in writing
- Explanation of limitations on representation
- Consent before confidential information is shared
Dual Agent Limitations
A dual agent:
- Cannot advocate for either party over the other
- Cannot disclose confidential information to either party
- Must treat both parties honestly and fairly
- Cannot advise on price or terms that benefit one party
What Dual Agents 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 urgency | Buyer's urgency |
| Seller's negotiating strategy | Buyer's negotiating strategy |
Exam Tip: Dual agency significantly limits the representation each party receives. Many parties choose not to consent to dual agency.
Designated Agency
Designated agency allows a brokerage to provide better representation when both parties are clients of the same company.
How Designated Agency Works
When a single brokerage has clients on both sides of a transaction:
- Broker designates agents - One agent represents the buyer exclusively, another represents the seller exclusively
- Full fiduciary duties - Each designated agent owes full fiduciary duties to their assigned client
- Confidentiality maintained - Designated agents keep client information confidential from each other
Key Rules for Designated Agency
| Rule | Explanation |
|---|---|
| Broker designates | The broker assigns specific agents to each party |
| Written designation | Must be documented |
| Full representation | Each agent can fully advocate for their client |
| Information barriers | Designated agents should not share confidential client information |
Designated Agent Duties
Each designated agent:
- Represents only their assigned client
- Owes full fiduciary duties to that client
- Keeps confidential information privileged
- Can advocate fully for their client's interests
Comparison: Dual Agency vs. Designated Agency
| Aspect | Dual Agency | Designated Agency |
|---|---|---|
| Agent involvement | Same agent for both | Different agents for each |
| Advocacy | Limited/neutral | Full advocacy |
| Confidentiality | Shared (limited) | Maintained separately |
| Fiduciary duties | Limited to both | Full to assigned client |
| Client preference | Less common | Generally preferred |
Office Policy Requirements
Every Michigan brokerage should have written policies addressing:
- Whether dual agency is permitted or prohibited
- Whether designated agency is permitted
- Procedures for obtaining consent
- How to handle conflicts of interest
Best Practice: Designated agency is generally preferred because each party receives full representation and advocacy.
What is required for dual agency in Michigan?
In designated agency, what duties does each designated agent owe?