Key Takeaways
- Dual agency occurs when one licensee represents both buyer and seller in the same transaction
- Virginia permits dual agency only with written informed consent from both parties
- In dual agency, the licensee becomes a limited agent to both parties
- Designated representation assigns specific licensees to represent each party within the same brokerage
- The principal broker must have policies addressing dual agency and designated representation
Dual Agency and Designated Representation in Virginia
Virginia permits both dual agency and designated representation, but each has specific requirements and limitations.
Dual Agency
Dual agency occurs when a single licensee represents both the buyer and seller (or landlord and tenant) in the same transaction.
Requirements for Dual Agency
- Written informed consent from both parties before acting as dual agent
- Disclosure of the dual agency relationship
- Written acknowledgment by both parties
Dual Agent Limitations
A dual agent becomes a limited agent and:
- 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
- Represents both parties' interests equally
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 willingness to accept terms | Buyer's willingness to pay more |
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
Designated Representation
Designated representation is Virginia's approach to providing full representation when one brokerage has clients on both sides of a transaction.
How Designated Representation Works
When a single brokerage has clients on both sides:
- Principal broker designates specific licensees to represent each party
- Full fiduciary duties are owed by each designated representative to their client
- Confidentiality maintained between designated representatives
Key Rules for Designated Representation
| Rule | Explanation |
|---|---|
| Principal broker designates | The broker assigns representatives in writing |
| Full representation | Each representative owes full duties to their client |
| Confidentiality preserved | Representatives keep client information confidential |
| Written disclosure required | Parties must be informed of designated representation |
Designated Representative Duties
Each designated representative:
- 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 Representation
| Aspect | Dual Agency | Designated Representation |
|---|---|---|
| Number of licensees | Same licensee for both | Different licensees 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 |
Principal Broker Requirements
The principal broker must:
- Have written policies on dual agency and designated representation
- Ensure proper disclosures are made
- Designate representatives when applicable
- Supervise all agency relationships
What happens to a licensee's duties when they become a dual agent in Virginia?
In Virginia designated representation, who assigns licensees to represent each party?
What must a dual agent disclose to all parties in Virginia?