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.

Fiduciary Duties and Client vs. Customer (Covered Nationally)

The six fiduciary duties (the OLD CAR set, Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable care) and the client-versus-customer distinction are developed in full in National Chapter 4 and apply the same way in Vermont, so they are not repeated here. The Vermont exam assumes you know them and instead tests how Vermont packages them into its firm-level agency models and its limited (dual) agency consent rules, the material below.

Keep one cross-cutting point in mind: in Vermont, as nationally, confidentiality to a client and disclosure of known property defects to everyone never conflict, because defect disclosure is owed to clients and customers alike.

Dual (Limited / Neutral) Agency in Vermont

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.

How the Agency Model Drives the Disclosure Form

The firm's choice of model is not an internal detail, it changes the paperwork the consumer must receive. A non-designated firm's service agreement states that the firm represents the client, and the firm cannot put two of its own agents on opposite sides of one deal. A designated firm's buyer or seller service agreement must name the individual designated agent, and that naming is what lets a second agent in the same office represent the other party.

The Vermont Mandatory Consumer Disclosure (MCD) form, covered in detail in the next section, is keyed to this choice: the version a licensee hands a consumer reflects whether the firm practices designated or non-designated agency. On the exam, if a fact pattern says a Vermont firm 'represents the seller as a firm' and a different in-house agent then wants to write a buyer's offer on the same listing, the firm must either decline or convert to limited (dual) agency with written consent, because non-designated loyalty is firm-wide.

Creating and Ending an Agency in Vermont

A Vermont agency relationship is created by a written service agreement (a listing agreement for a seller or a buyer-representation agreement for a buyer) that identifies the model and, for designated agency, the named agent. Until that agreement is signed, a consumer the licensee is merely assisting is a customer, not a client, and is owed only the baseline duties listed above plus timely delivery of the MCD.

Agency ends the same ways a national agency ends, by performance (the deal closes), expiration of the agreement's term, mutual agreement, or revocation, but two Vermont-relevant points recur on the exam. First, the duty of confidentiality survives termination: an agent may never later reveal a former client's negotiating position or motivation. Second, because Vermont prohibits open-ended listings, the service agreement must carry a definite expiration date and may not auto-renew, so a relationship that has run past its stated end date has terminated by its own terms.