2.2 Dual Agency and Designated Agency

Dual Agency in Michigan

Dual agency exists when a single licensee (or the same individual under one broker) represents both the buyer and the seller in one transaction. Michigan permits it, but only with prior written informed consent from both parties. The consent must be obtained before confidential information is shared and must spell out how representation is curtailed.

Requirements checklist

1. Written disclosure of the dual-agency relationship
2. Informed written consent from buyer AND seller
3. Plain explanation of the limits on advocacy
4. Consent secured before confidential information passes

The neutral-agent rule

Once dual agency begins, the agent becomes neutral. A dual agent may not:

• Advocate for one party's price or terms over the other's
• Advise the buyer to offer less or the seller to counter higher
• Disclose one party's confidential information to the other

The agent still owes honesty, accounting, and disclosure of adverse material facts to both.

What a dual agent must keep silent

Exam tip: Because each party loses an advocate, dual agency is the weakest form of representation. Undisclosed dual agency is a violation of MCL 339.2512 and can void the agent's right to a commission.

Designated Agency

Designated agency solves the conflict differently. When one brokerage has clients on both sides, the broker designates one salesperson to represent the buyer exclusively and a different salesperson to represent the seller exclusively. Each designated agent keeps full fiduciary duties (OLD CAR) to their assigned client.

How it works

• The broker makes the designation (in writing)
• Each designated agent advocates fully — price advice, negotiation, strategy
• An information barrier keeps the two agents from sharing client secrets
• The broker who oversees both may function as a dual agent at the supervisory level

Designated agent duties

Each designated agent represents only the assigned client, owes full fiduciary duties, keeps that client's information privileged, and may advocate fully on price and terms.

Side-by-Side Comparison

Worked scenario

Lakeshore Realty lists the Smith home; a Lakeshore buyer-client wants to make an offer. If Agent Jones tries to write both sides alone, that is dual agency — Jones must get both signatures and go neutral. Instead the broker designates Jones for the seller and Agent Lee for the buyer; both keep full fiduciary duties and negotiate at arm's length.

Office Policy

Every Michigan brokerage must adopt a written policy stating whether dual agency is permitted or prohibited, whether designated agency is offered, how consent is captured, and how conflicts are handled.

Best practice: Designated agency is generally preferred because each consumer retains genuine advocacy.

Consent, Disclosure, and Timing

The defining feature of dual agency is that consent must be informed and in writing and must come before confidential information changes hands. If Agent Jones already knows the seller's bottom price and the buyer's ceiling and only then asks for dual-agency consent, the harm is done — the agent already holds information that should never have crossed. That is why MCL 339.2517's disclosure-before-confidential-information rule is the backbone of the dual-agency analysis.

Accidental (undisclosed) dual agency

A salesperson can drift into undisclosed dual agency without meaning to — for example, by giving a customer-buyer advice on what to offer while already representing the seller. This is a license violation and can void the right to a commission. The cure is to either (a) obtain written dual-agency consent before going further, or (b) refer one party to a different designated agent.

Who can consent

Common exam scenarios

• A dual agent tells the buyer the seller "will take less." — Violation. Disclosing the seller's confidential negotiating posture breaches neutrality.
• A designated seller-agent advises a higher counteroffer. — Permitted. A designated agent owes full fiduciary duties to the assigned client.
• A broker assigns two agents but they share a desk and discuss the file openly. — Problem. The information barrier is required; casual leakage defeats designated agency.

Memory hook: Dual agent = neutral referee; designated agents = two opposing coaches under one athletic director (the broker). The broker stays neutral while each agent plays to win for one client.