Key Takeaways
- Pennsylvania permits dual agency only with written informed consent from both parties
- In dual agency, the licensee cannot advocate for either party and must remain neutral
- Designated agency allows different licensees in the same firm to represent different parties
- Confidential information cannot be disclosed without written permission in dual agency
- Both parties must sign a consent form acknowledging the limitations of dual agency
Dual Agency and Designated Agency in Pennsylvania
Pennsylvania permits both dual agency and designated agency when a potential conflict exists, but strict requirements apply.
What is Dual Agency?
Dual agency occurs when:
- The same licensee represents both buyer and seller
- Both parties have given written informed consent
- The licensee's advocacy is limited
"Dual" Means Limited
In dual agency, the licensee 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 |
| Disclosure | What can and cannot be done |
| Signature | Both parties sign the consent |
Disclosure of Limitations
The consent form must explain:
- The licensee will not be able to advocate for either party
- Confidential information will be protected
- The licensee 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
Designated Agency
Pennsylvania also allows designated agency as an alternative to dual agency.
How Designated Agency Works
| Feature | Description |
|---|---|
| Same brokerage | Both licensees work for same broker |
| Different agents | Each party has their own licensee |
| Full representation | Each agent can advocate for their client |
| Broker supervision | Broker oversees both and remains neutral |
Requirements for Designated Agency
- Written agreement establishing designated agency
- Different licensees assigned to each party
- Confidentiality maintained between designated agents
- Broker remains neutral and supervises both
Comparison: Dual vs. Designated Agency
| Aspect | Dual Agency | Designated Agency |
|---|---|---|
| Agents involved | Same licensee for both | Different licensees |
| Advocacy | Limited/neutral | Full for each party |
| Confidentiality | Protected from both | Protected within teams |
| Broker's role | May be the dual agent | Neutral supervisor |
| Client preference | May not want same agent | Prefer own advocate |
In-House Transactions
When buyer and seller clients are both with the same brokerage:
Options Available
- Dual Agency - One licensee represents both (with consent)
- Designated Agency - Different licensees for each party
- Release One Client - One party seeks different representation
- Transaction Licensee - Provide services without representing either
Best Practice: Designated agency is often preferred as it allows each party to have their own advocate while keeping the transaction within the brokerage.
Broker Office Policies
Brokers may establish policies regarding dual and designated agency:
| Policy Option | Description |
|---|---|
| Permit both | Allow with proper consent |
| Designated only | Prefer designated over dual |
| Prohibit dual | Never practice dual agency |
| Case-by-case | Evaluate each situation |
If a broker's policy prohibits dual agency and a conflict arises, designated agency or separate representation must be arranged.
What is the key difference between dual agency and designated agency in Pennsylvania?
In a Pennsylvania dual agency situation, a licensee can: