2.1 Connecticut Agency Relationships
Key Takeaways
- Connecticut recognizes seller agency, buyer agency, dual agency, and designated agency; transaction-only (facilitator) brokerage is NOT a recognized category in CT
- The Real Estate Prospective Parties Disclosure Notice must be given at the beginning of the first personal meeting about the consumer's specific needs (DCP 04/2024 form)
- Dual agency requires written informed consent from BOTH buyer and seller before an offer is made (CGS 20-325g)
- Designated agency lets the broker appoint one in-house agent to each party while the broker remains a dual agent
- Six fiduciary duties (OLD-CAR: Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable care) are owed to clients only
Types of Agency Recognized in Connecticut
Connecticut law (CGS Chapter 392) authorizes four agency relationships. Note that transaction brokerage (a non-agency "facilitator" used in some states) is NOT a separate recognized category in Connecticut; a licensee is always an agent of someone unless an unrepresented party signs an Unrepresented Person Acknowledgement.
Seller Agency and Buyer Agency (Single Agency)
A seller's agent (listing agent) owes full fiduciary duties to the seller; a buyer's agent owes them to the buyer. Connecticut requires a written agency agreement before performing brokerage services for a client — an oral listing or oral buyer-rep arrangement is unenforceable for compensation under CGS 20-325a.
Memorize the six client duties with the acronym OLD-CAR:
| Duty | What it means | Owed to |
|---|---|---|
| Obedience | Follow all lawful instructions | Client only |
| Loyalty | Put the client's interests first | Client only |
| Disclosure | Tell the client all known material facts | Client only |
| Confidentiality | Protect price/motivation/strategy (survives the transaction) | Client only |
| Accounting | Account for all money and documents | Client only |
| Reasonable care | Use competent skill and diligence | Client only |
Dual Agency
Dual agency arises when ONE brokerage represents both buyer and seller in the same transaction. The dual agent becomes neutral: it cannot disclose the seller's lowest acceptable price, the buyer's top offer, or either party's motivation. Under CGS 20-325g, both clients must give written informed consent BEFORE an offer is presented — consent obtained at the closing table is too late.
Designated Agency
Designated agency is Connecticut's solution to in-house dual-agency conflicts. When two agents in the same firm have the buyer and the seller, the broker may appoint (designate) one agent to represent each client solely. The two designated agents act as single agents owing full OLD-CAR duties; only the appointing broker remains a dual agent. The broker must give written notice and obtain written consent from both parties (CGS 20-325i).
Common trap: Students confuse "the broker remains a dual agent" with "the agents are dual agents." In designated agency the individual agents are SINGLE agents — only the broker straddles both sides.
How Agency Is Created and Terminated
Agency in Connecticut is created by a written agreement (listing agreement, buyer-agency agreement, or written consent for dual/designated agency). It is NOT created merely because a customer talks to an agent. An implied or accidental dual agency can arise if an agent starts advocating for both sides without written consent — a serious violation that exposes the licensee to discipline by the Connecticut Real Estate Commission.
An agency relationship terminates by: completion (closing), expiration of the listing/buyer-agency term, mutual agreement, or revocation/renunciation. Even after termination, the duty of confidentiality survives indefinitely — an agent can never later reveal a former client's price floor or motivation.
| Triggering event | Effect on the agency |
|---|---|
| Closing of the transaction | Agency ends; confidentiality continues |
| Expiration of the agreement term | Agency ends automatically |
| Mutual rescission | Both parties release each other |
| Death/incapacity of either party | Agency terminates |
| Destruction of the property | Subject matter gone; agency ends |
Agency Disclosure Requirements
The Prospective Parties Disclosure Notice
Under Conn. Agencies Regs. Sec. 20-325d-2, a licensee must give the Real Estate Prospective Parties Disclosure Notice (current DCP form revised 04/2024) at the beginning of the first personal meeting concerning the consumer's specific real-estate needs. The notice tells the consumer whom the licensee represents so the consumer does not unknowingly volunteer confidential information to the other side's agent.
| Question | Connecticut rule |
|---|---|
| When? | Beginning of the first in-person meeting about the consumer's specific needs |
| Trigger | Discussing the consumer's specific property needs (not a casual open-house hello) |
| Form | DCP-approved Prospective Parties Disclosure Notice |
| Buyer exemption | Not required to buyers if a sign/pamphlet discloses the agency AND specific needs are not discussed |
| Documentation | Licensee should retain the signed/acknowledged notice |
Worked example: A listing agent meets a walk-in at an open house. As soon as the visitor starts describing the home they want and their budget, the agent must hand over the Prospective Parties notice stating the agent works for the SELLER. The visitor can then decide whether to keep negotiating strategy private.
Duties Owed to ALL Parties (Customers Included)
Even a non-client "customer" is owed baseline duties. These are NOT the OLD-CAR fiduciary duties — they are honesty and fair dealing:
- Deal honestly and in good faith
- Disclose known material defects in the property
- Present all written offers promptly
- Treat all parties fairly and avoid misrepresentation
- Account for money (e.g., earnest money/escrow) belonging to others
Material Facts vs. Confidential Information
| Must disclose to all (material fact) | Owed to client only (confidential) |
|---|---|
| Roof leaks, failed septic, foundation cracks | Seller's lowest acceptable price |
| Known underground oil tank | Buyer's maximum budget |
| Active termite infestation | Either party's motivation/urgency |
| Zoning violation affecting use | Negotiating strategy |
Compensation rule: Who pays the commission does NOT determine agency. A seller can pay a buyer's-agent commission while the buyer's agent still owes loyalty to the buyer (CGS 20-325c). Compensation is fully negotiable and never set by law.
Exam-Day Application
The Connecticut salesperson exam is administered by PSI and contains 110 scored questions — 80 on the national portion and 30 on the Connecticut state portion — with a separate 70% passing requirement on each (56/80 national and 21/30 state). Agency and disclosure rules appear on both portions, so distinguish national agency theory from Connecticut's specific forms and statutes.
Watch for these recurring question patterns:
- Disclosure timing: the answer is "first personal meeting about the consumer's specific needs," not "at closing" or "within 3 days."
- Dual-agency consent timing: written consent must precede the offer (CGS 20-325g).
- Designated agents = single agents; only the broker is the dual agent.
- Duties to all parties (honesty, material-fact disclosure, presenting offers) versus fiduciary OLD-CAR duties owed only to clients.
- Confidentiality survives the end of the relationship.
Best practice: When unsure on a scenario question, ask "Is this person my CLIENT or a CUSTOMER?" Clients get OLD-CAR; customers get honesty plus material-fact disclosure only.
In a Connecticut designated agency arrangement, what is the agency status of the two appointed agents and the broker?
Under Connecticut regulations, when must the Real Estate Prospective Parties Disclosure Notice be provided?
Which item must a Connecticut licensee disclose to ALL parties, even a customer they do not represent?