2.1 Louisiana Agency Relationships
Key Takeaways
- Louisiana agency rules come from the Real Estate License Law and the brokerage-relationships statute (R.S. 9:3891 et seq.)
- Licensees must provide the Agency Disclosure Informational Pamphlet at the first contact where confidential information is likely exchanged
- Louisiana recognizes single agency, designated agency (the in-firm default for both sides), and dual agency
- Dual agency requires prior written consent from both parties; the dual agent then cannot advocate price or terms for either side
- All licensees owe every party honesty, fair dealing, disclosure of known material defects, and prompt presentation of all offers
Louisiana agency law comes from the Real Estate License Law and the brokerage-relationships statute (R.S. 9:3891 et seq.). It separates what a licensee owes a client (the represented party) from what is owed a customer (an unrepresented party), and it sets exactly when the relationship must be disclosed.
The Agency Disclosure Pamphlet
Every licensee must give the Agency Disclosure Informational Pamphlet to a consumer at the first contact where confidential or material information is likely to be discussed - in practice, before taking a listing, writing an offer, or discussing motivation or finances. The pamphlet explains the available relationships so the consumer can choose knowingly.
| Trigger | Action required |
|---|---|
| First substantive contact | Provide the Agency Disclosure Pamphlet |
| Establishing representation | Sign a written agency agreement |
| Both sides in one firm | Disclose designated or dual agency in writing |
Exam point: Disclosure is about timing. Waiting until the offer to reveal who you represent is a violation; the duty triggers at the first meaningful conversation.
Types of Agency Relationships
Single Agency
A single agent represents only one party - the seller (listing agent) or the buyer (buyer's agent) - and owes that client the full set of fiduciary-style duties.
Duties owed to the client (memory aid: OLD CAR):
- Obedience to lawful instructions
- Loyalty - put the client's interests first
- Disclosure of material facts to the client
- Confidentiality of the client's private information
- Accounting for all funds and documents
- Reasonable care, skill, and diligence
Designated Agency
Designated agency is Louisiana's standard solution when one firm has clients on both sides. The broker designates one agent for the seller and a different agent for the buyer; each owes full duties to their client while the broker supervises and protects each side's confidential information.
| Feature | Designated Agency |
|---|---|
| Who represents whom | Different in-house agents for each party |
| Confidentiality | Each agent keeps their own client's secrets |
| Broker role | Supervises; advocates for neither side |
Dual Agency
Dual agency is when a single licensee (or a firm without designated agents) represents both parties. It is permitted only with prior written consent of both, after which the licensee gives limited service.
| Requirement | Detail |
|---|---|
| Written consent | Required from both parties before dual agency begins |
| Dual agent cannot | Disclose the price/terms one party will accept, or advocate for one side |
| Dual agent must still | Be honest, present all offers, disclose material defects |
Duties to ALL Parties (Client or Not)
Regardless of whom they represent, every Louisiana licensee owes every party a baseline that cannot be waived.
| Duty to all parties | Meaning |
|---|---|
| Honesty and fair dealing | No fraud, misrepresentation, or half-truths |
| Disclose known material defects | Latent defects affecting value or safety must be revealed |
| Present all offers promptly | Every written offer goes to the seller without delay |
| Account for funds | Handle deposits through the broker's trust account |
| Disclose agency status | Make clear which party, if any, is represented |
Key distinction: Loyalty and confidentiality are owed only to clients. Honesty and disclosure of material defects are owed to everyone, including the customer on the other side.
Written Agreements, Compensation, and Liability
Louisiana relies on written agreements to establish representation: a listing agreement for a seller, a buyer-agency agreement for a buyer, and a dual-agency consent for both. Each should name the parties, describe the property or search, and state compensation, duration, and agency type.
A licensee may not accept compensation from more than one party without full written disclosure to, and consent from, all parties. Critically, commission does not determine agency: a buyer's agent can be paid from the seller's proceeds and still owe loyalty to the buyer. Who pays is a business arrangement; who is represented is set by the agreement and disclosure.
Finally, the sponsoring broker is vicariously liable for the agency conduct of affiliated salespersons. A misrepresentation by a salesperson can expose the broker to discipline and civil liability, which is why brokers train agents on disclosure timing and supervise their transactions.
Client vs. Customer, and the Source of Agency
A client is the party the licensee represents under an agency agreement; a customer is a party the licensee assists but does not represent. The exam frequently turns on this line, because the duties differ sharply.
| To a CLIENT | To a CUSTOMER |
|---|---|
| Loyalty, confidentiality, obedience, full advocacy | Honesty and fair dealing |
| Disclosure of all material facts | Disclosure of known material defects |
| Accounting and reasonable care | Accurate answers to direct questions |
Agency in Louisiana arises by express written agreement, not by accident. A buyer's agent who shows a listed home to their buyer is the buyer's single agent and the seller's customer; the listing agent is the seller's agent and the buyer's customer. Avoid undisclosed dual agency - if the same agent ends up advising both sides, the relationship must be converted to disclosed dual or designated agency with written consent, or one side must obtain separate representation.
Trap: A common exam scenario describes an agent who "helps" an unrepresented buyer so much that the buyer reasonably believes they are represented. This implied/ostensible agency can create accidental duties and discipline; clarify the relationship in writing early.
What type of agency exists when different agents in the same firm represent the buyer and the seller in one transaction?
Which duty does a Louisiana licensee owe to ALL parties, even an unrepresented customer?
What must happen before a licensee may act as a dual agent in Louisiana?
In Louisiana, who is responsible for the disclosure that the Agency Disclosure Pamphlet must reach the consumer in time?