2.2 Limited Dual Agency in Washington

What Limited Dual Agency Is

Limited dual agency occurs when one firm represents both the buyer and the seller in the same transaction. Washington allows it, but only with informed, written, initialed consent from both principals. The 2024 SB 5191 rewrite replaced the term "dual agency" with "limited dual agency" to stress that the broker's ability to advocate is sharply restricted.

How Limited Dual Agency Arises

The second row is a key 2024 change. Previously the individual brokers stayed separate; now the designated broker (the licensee responsible for the firm) and supervising managing brokers are expressly treated as limited dual agents subject to all the restrictions, even though they never met the clients.

Consent Requirements

Before acting as a limited dual agent, a broker must:

1. Disclose the limited dual agency situation to both principals.
2. Obtain written consent that is initialed by each represented party inside the brokerage services agreement.
3. Include an acknowledgment that a limited dual agent "may not advocate terms favorable to one principal to the detriment of the other principal."

Trap: Verbal consent is never enough. The statute requires the consent to be initialed in the written agreement. An answer choice offering "verbal acknowledgment from both parties" is always wrong.

The required acknowledgment language is specific: the agreement must state that a limited dual agent may not advocate terms favorable to one principal to the detriment of the other. A broker who obtains a generic signature without that initialed acknowledgment has not validly created limited dual agency, and any later advocacy for one side becomes a breach of duty to the other.

What a Limited Dual Agent CAN and CANNOT Do

Confidential vs. Disclosable Information

Without written permission, a limited dual agent must not reveal:

The limited dual agent must still disclose material facts about the property's condition to both sides, facts required by law, and anything the affected party has authorized.

Firm-Level Duties Continue

Even when the firm is a limited dual agent, each individual broker still owes full client duties — loyalty, confidentiality, obedience — to their own principal. The firm typically uses information barriers and written policies so the listing broker and buyer's broker do not leak each other's confidential data.

Avoiding Limited Dual Agency

Best practice: Explain the neutrality limitation before asking for consent, so the principal understands the broker can no longer fully advocate for them.

Worked Scenario

A listing broker has the home of Seller A listed. The broker's own buyer client, Buyer B, wants to make an offer on that exact house. The broker is now headed into limited dual agency. The correct procedure: disclose the situation to both Seller A and Buyer B, explain that the broker can no longer advocate for either, and obtain initialed written consent from each inside their brokerage services agreements. If Buyer B confided that they would pay up to $650,000, the broker may not tell Seller A that figure. If Seller A said they would accept $600,000, the broker may not tell Buyer B.

The broker writes up whatever offer Buyer B chooses and presents it neutrally.

Now change one fact: instead of the same broker, Broker X (listing side) and Broker Y (buyer side) work at the same firm. Both individual brokers still fully represent their own client, but the firm's designated broker and any managing broker who supervises both is automatically a limited dual agent and must observe the neutrality and confidentiality rules at the firm level.

Common trap: Students assume that because two different brokers are involved, no consent is needed. Wrong — the firm is the dual agent, and initialed consent from both principals is still required.