2.2 West Virginia Agency Relationships
Key Takeaways
- West Virginia recognizes single agency (representing one party) and dual agency, which is permitted only with the written consent of both parties
- Dual agency arises when one licensee represents both sides, or when two licensees in the same brokerage represent opposing parties in the same transaction
- A single agent owes clients the fiduciary duties summarized by OLD CAR: Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care
- Licensees owe honesty, disclosure of known material facts, and fair dealing to all parties, even non-clients
- A licensee may not accept compensation from more than one party, and must disclose any personal interest, without full written disclosure to all parties
West Virginia recognizes a limited set of agency relationships, and the exam expects you to distinguish them and to know the duties that attach to each.
Single Agency
A single agent represents only one party in a transaction and owes that client undivided loyalty:
| Single-agent role | Represents |
|---|---|
| Seller’s agent | Seller only |
| Buyer’s agent | Buyer only |
| Landlord’s agent | Landlord only |
| Tenant’s agent | Tenant only |
Single agency is the cleanest relationship because the agent’s duties point in one direction, so there is no conflict between competing principals.
Dual Agency
Dual agency exists when the same brokerage owes duties to both sides of one transaction. It arises in two ways:
- One licensee represents both the buyer and the seller (or landlord and tenant) in the same transaction; or
- Two licensees in the same brokerage each represent an opposing party — because both work under the same broker, the brokerage is a dual agent.
Requirements for Lawful Dual Agency
| Requirement | Why it matters |
|---|---|
| Written consent of both parties | Informed, documented agreement is mandatory |
| Full disclosure of the limitations | Both sides must understand what the agent can no longer do |
| Confidentiality between sides | The agent cannot share one party’s confidential information with the other |
| Neutrality | The agent must remain impartial and cannot advocate price or terms for either |
Warning: Dual agency sharply limits the service either party receives. An agent who slips into dual agency without prior written consent has committed undisclosed dual agency, a serious disciplinable violation. Consent must come before the dual relationship begins, not after the fact.
Fiduciary Duties to Clients — OLD CAR
A licensee owes a client the following fiduciary duties, remembered as OLD CAR:
| Duty | Meaning |
|---|---|
| O — Obedience | Follow the client’s lawful instructions |
| L — Loyalty | Put the client’s interests above all others, including the agent’s own |
| D — Disclosure | Reveal all material facts affecting the client’s interests |
| C — Confidentiality | Protect the client’s confidential information, even after the transaction |
| A — Accounting | Account accurately for all funds and documents |
| R — Reasonable care | Act with the skill and diligence of a competent professional |
In dual agency, the conflicting duties of loyalty, disclosure, and confidentiality are the ones that must be curtailed — which is exactly why both parties must consent in writing.
Duties Owed to ALL Parties
Regardless of whom they represent, licensees owe every party — including customers who are not clients — a baseline of fair treatment:
| Duty to all parties | Meaning |
|---|---|
| Honesty | Be truthful in every statement |
| Material-fact disclosure | Disclose known material defects affecting the property |
| Fair dealing | Treat all parties fairly and in good faith |
| Accounting for funds | Handle any funds received properly |
The distinction is central: fiduciary loyalty and confidentiality go to the client; honesty and disclosure of known defects go to everyone. A buyer’s agent owes the seller honesty and disclosure of known material defects, but owes loyalty only to the buyer.
What Is Confidential?
Confidential client information typically includes the client’s motivation, the highest a buyer will pay or the lowest a seller will accept, the client’s finances, and personal circumstances that affect negotiation. It may be disclosed only if required by law, authorized in writing by the client, already public, or necessary to prevent harm.
Personal-Interest and Compensation Disclosure
Two conflict-of-interest rules appear on the state exam:
Personal interest: A licensee must disclose in writing to all parties when acting for themselves, an immediate family member, or any entity in which they hold an interest, or when they otherwise have a personal stake in the property or transaction. Buying or selling for one’s own account without disclosing licensure and interest is a violation.
Compensation from more than one party: A licensee may not accept compensation from more than one party to a transaction without full written disclosure to all parties. Receiving a fee from a single party (the normal commission) needs no special disclosure; receiving fees from both sides (or a referral fee plus a commission) does.
| Situation | Requirement |
|---|---|
| Fee from one party (ordinary commission) | No special disclosure |
| Fee from multiple parties | Written disclosure to ALL parties |
| Acting for self/family/own interest | Written disclosure to ALL parties |
Memory aid: When a licensee’s loyalty could be questioned — two paychecks or a personal stake — the cure is the same: disclose it in writing to everyone before proceeding.
Customers vs. Clients
A distinction underlies all of the above: a client is the party the licensee represents (owed full fiduciary duties), while a customer is a party the licensee deals with but does not represent (owed honesty, fair dealing, and disclosure of known material defects). A seller’s agent treats the buyer as a customer; a buyer’s agent treats the seller as a customer. Knowing which hat you wear determines which duties you owe to each person at the table.
| Client | Customer | |
|---|---|---|
| Loyalty / confidentiality | Yes | No |
| Obedience to lawful instructions | Yes | No |
| Honesty & fair dealing | Yes | Yes |
| Disclose known material defects | Yes | Yes |
When Agency Ends
Agency relationships terminate by completion of the purpose (closing), expiration of the agreement’s term, mutual agreement, revocation or renunciation, or operation of law (death, incapacity, or bankruptcy of a party). Two duties survive termination: the duties of confidentiality and accounting. An agent who learned a former client’s financial details cannot later use or reveal them, and must still account for any funds — even after the listing or buyer-agency agreement has ended.
This survival of confidentiality is a favorite exam point: the relationship ends, but the obligation to keep the client’s secrets does not.
What type of agency exists when one licensee represents both the buyer and the seller in the same transaction?
In the OLD CAR memory aid, which duties must be limited when a licensee acts as a dual agent?
A buyer’s agent in West Virginia owes the seller (a non-client) which of the following?
When may a licensee accept compensation from more than one party to a transaction?