2.2 Vermont Agency Relationships

Two Firm-Level Agency Models

Vermont law lets a brokerage choose, as an office policy, how loyalty is organized. The choice is firm-wide and drives which MCD version is used and whether the firm can ever serve both sides of a single transaction.

Non-Designated Agency

In a non-designated agency firm, the duty of loyalty is shared by every agent in the firm. The whole brokerage — not one individual — represents the client.

• Because loyalty is firm-wide, no agent in the firm may represent a buyer and seller whose interests conflict in the same deal.
• If the firm already represents the seller, it generally cannot represent a buyer for that same property without converting to limited (dual) agency with consent.

Designated Agency

The Vermont Real Estate Commission amended its rules in 2015 to authorize designated agency. Here, the firm appoints specific (designated) individual agents to represent each client, and loyalty runs to that named person rather than the whole firm.

• The designated agent(s) must be named in the buyer or seller service agreement.
• Because loyalty is individualized, one agent can represent the seller and a different agent at the same firm can represent the buyer in the same transaction — each owes full loyalty to their own client.
• The supervising broker oversees both designated agents but does not breach loyalty by doing so.

Exam trap: Designated agency is NOT the same as dual agency. With two different designated agents, neither is a dual agent — each fully advocates for one client. Dual/limited agency arises only when the same agent serves both parties.

Worked Scenario

Green Mountain Realty practices designated agency. Agent A is designated for the seller of 12 Maple St.; Agent B is designated for a buyer interested in that home. Each owes full fiduciary loyalty to their own client, and the broker ensures confidential information does not pass between them. This is permissible. If instead Agent A tried to represent BOTH the seller and the buyer, that single agent would have to step down to limited agency with everyone's written consent.

Client vs. Customer

The single most-tested distinction is client versus customer. A client has an agency relationship and receives full fiduciary duties; a customer does not and receives only baseline fair treatment.

Trap: A seller's agent who shows the home to an unrepresented buyer must be honest and disclose known defects, but must NOT reveal the seller's lowest acceptable price or coach the customer to negotiate against the seller.

The Six Fiduciary Duties — "OLD CAR"

A client is owed six fiduciary duties. Memorize them with OLD CAR:

Note the tension: Disclosure to a client is broad, but Confidentiality means an agent does not disclose the client's secrets to the other side. On the exam, watch for fact patterns where these two collide — confidentiality protects the client; disclosure of property defects protects everyone.

Dual (Limited / Neutral) Agency

A Vermont firm or agent may represent both seller and buyer in one transaction only as a limited agent (also called dual or neutral agency), and only with:

1. Informed, written consent of all parties;
2. Full disclosure of the limited relationship; and
3. Strict neutrality — the limited agent may not advocate for, or disclose confidential information of, either party.

Duties Owed to ALL Parties

Regardless of model or representation, every Vermont licensee owes these baseline duties to both clients and customers: honesty, fair dealing, accurate information, disclosure of known material defects, accounting for funds, and compliance with fair housing and real estate law. These never switch off, even for an unrepresented customer.