2.2 DC Agency Relationships

DC law (D.C. Code § 42-1703 and the implementing regulations in Title 17 DCMR) defines the types of brokerage relationships a licensee may form. The state exam expects you to distinguish single agency, dual representation, and designated representation, and to know the consent rules that make each lawful.

Single Agency

A single agent (or single representative) represents only one party in a transaction and owes that party undivided loyalty.

The COALD Fiduciary Duties

The national portion uses the mnemonic COALD (also taught as OLD CAR) for the duties a single agent owes the client:

• Care and skill — exercise reasonable competence and diligence.
• Obedience — follow the client's lawful instructions.
• Accounting — account for all money and property.
• Loyalty — put the client's interests ahead of your own.
• Disclosure — disclose all known material facts.

To these, DC adds an overarching duty of confidentiality — protecting the client's personal and financial information.

Scenario: A tenant's agent learns the tenant can actually afford $3,200/month but wants to offer $2,900. Loyalty and confidentiality forbid the agent from leaking the $3,200 figure to the landlord.

Dual Representation

Dual representation occurs when one licensee represents both parties — for example, the same agent represents both the buyer and the seller in the same sale. Because the parties' interests conflict, DC permits it only under strict conditions.

Requirements for Lawful Dual Representation

Important: A licensee may act as a dual representative only with the written consent of all clients to the transaction. The statute provides that written consent and disclosure "shall be presumed to have been given" against any client who signs the prescribed disclosure.

A dual representative cannot fully advocate for either side; the role is limited to facilitating the transaction without disclosing one client's confidences to the other.

Designated Representatives

DC lets a brokerage avoid full dual representation by using designated representatives.

How It Works

A principal broker or supervising broker may assign:

• different licensees affiliated with the firm,
• as designated representatives for different clients,
• in the same transaction,
• to the exclusion of all other licensees in the firm.

The Critical Distinction

Critical Point: Even though the two designated agents are not dual representatives, the broker who supervises both is a dual representative. This is one of the most heavily tested DC exam facts.

Scenario: Agent Lee (representing the buyer) and Agent Ortiz (representing the seller) both work at Capital Realty. The principal broker designates each to one client. Lee and Ortiz remain single representatives; the principal broker is the dual representative. Lee may not share the buyer's maximum price with Ortiz.

Duties After Termination

When a brokerage relationship ends, most duties stop — but two endure:

Exam Tip: Confidentiality survives termination. A common wrong answer is "all duties end at termination" — they do not.

Compensation and Agency

Two compensation rules are frequently tested.

1. Disclosure when paid by more than one party. A licensee may accept compensation from the parties to a transaction, but multiple-party or third-party payment must be disclosed in writing to all parties.

2. Compensation does not create agency. Receiving a fee from a party does not automatically make that party your client. Agency in DC arises from the brokerage relationship and the disclosure framework — not from who signs the commission check.

Trap: A buyer's agent is often paid through the listing-side commission split funded by the seller. The buyer's agent still represents the buyer, not the seller, because compensation does not determine agency.

Choosing the Right Relationship: A Decision Walk-Through

On the exam, you will be handed a fact pattern and asked to identify the relationship and what consent (if any) is needed. Work it in this order:

1. Does one licensee deal with both sides? If no — single agency for each side at different firms; no special consent. If yes — go to step 2.
2. Is it the same individual agent representing both parties? If yes — that is dual representation, which is lawful only with written consent from all clients.
3. Are two different agents at the same firm each assigned to one client? If yes — that is designated representation: each agent is a single representative, and the supervising broker is the dual representative.

Scenario: A solo broker with no other agents lists a home and then a buyer-client of that same broker wants to buy it. With only one licensee, designated representation is impossible — the broker must obtain written dual-representation consent from both the buyer and the seller or refer one party out.

Exam Tip: The number of firms and the number of individual licensees drive the answer. One agent, both sides = dual; two firm agents, one client each = designated.