Key Takeaways
- Utah recognizes single agency (representing one party only) and limited agency (dual agency with consent)
- A single agent represents only the buyer OR the seller, never both simultaneously
- Limited agency requires prior written informed consent from both parties
- Licensees must define the scope of their agency by executing a written agency agreement with principals
- Up to 70% of real estate lawsuits are related to limited agency situations
Utah Agency Relationships
Utah law defines the types of agency relationships that real estate licensees may have with consumers. Understanding these relationships and associated duties is critical for the state exam.
Types of Agency Relationships
Single Agency
A single agent is a licensee who represents only one party in a transaction:
| 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
Limited Agency (Utah's Dual Agency)
Limited agency occurs in Utah when:
- Two agents in the same brokerage represent the buyer and seller in the same transaction (in-house sale), OR
- One agent represents both the buyer and seller
Important: Utah uses the term "limited agency" rather than "dual agency" because the agent's duties to each party are LIMITED when representing both sides.
Requirements for Limited Agency
| Requirement | Description |
|---|---|
| Written consent | Both parties must provide prior informed consent in writing |
| Clear explanation | Agent must explain in writing that each party may be represented by a separate agent |
| Written agency agreement | Must execute a written agreement defining the scope of agency |
| Confidentiality limits | Cannot disclose price/terms one party will accept |
| Neutral position | Must maintain duty of neutrality to both parties |
Warning: Approximately 70% of real estate lawsuits are related to limited agency situations. Full disclosure and proper documentation are essential.
Fiduciary Duties in Utah
Utah law establishes specific fiduciary duties that agents owe to their principals:
Duties to Principals (Clients)
| Duty | Description |
|---|---|
| Loyalty | Act in the principal's best interests |
| Obedience | Follow lawful instructions from the principal |
| Disclosure | Inform principal of any material facts learned |
| Confidentiality | Keep confidential information given by principal |
| Accounting | Account for all funds and property received |
| Reasonable Care | Exercise reasonable skill and care |
Full Disclosure Obligation
The duty of "full disclosure" obligates the agent to inform the principal of any material fact the agent learns about, including:
- Property conditions
- Market information
- Other offers (if permitted)
- Any information that could affect the principal's decisions
Confidentiality Requirements
Confidentiality prohibits the agent from disclosing, without permission, any information given by the principal that would likely weaken the principal's bargaining position if it were known.
| Confidential Information | Examples |
|---|---|
| Motivation to sell/buy | "Seller is desperate to sell" |
| Bottom line price | "Buyer will pay up to $500,000" |
| Personal circumstances | Financial difficulties, divorce, relocation |
| Negotiating strategy | "Seller will accept less if..." |
Exceptions to confidentiality:
- Information required by law to be disclosed
- Known material defects affecting the property
- Information that becomes public knowledge
- Information the principal authorizes in writing
Limited Agent Duties
When acting as a limited agent (dual agency), specific duties apply:
| Duty | Description |
|---|---|
| Obedience | Obey lawful instructions from both parties, consistent with duty of neutrality |
| Neutrality | Remain impartial; cannot advocate for one party over another |
| Disclosure | Disclose material facts to both parties |
| Confidentiality | Maintain confidentiality for both parties' sensitive information |
Key Point: A limited agent cannot help one party negotiate against the other or share confidential information between parties.
What is Utah's term for dual agency?
What is required before a Utah licensee can act as a limited agent?
Which of the following is a duty a limited agent owes to both parties?