California Real Estate Broker ExaminationReal Estate PracticeMedium
A real estate broker is acting as a dual agent in a transaction where they represent both the buyer and the seller. California law requires specific disclosures and consents for dual agency. Which of the following statements regarding dual agency in California is true?
- AA dual agent can advise both parties on the appropriate price for the property.
- BOral consent to dual agency is sufficient if documented by the broker.
- CDual agency is illegal in California under any circumstances.
- DBoth the buyer and seller must provide their informed written consent to the dual agency.
Show answer & explanationAnswer & explanation
Correct answer: D. Both the buyer and seller must provide their informed written consent to the dual agency.
In California, dual agency is permissible, but it requires the informed written consent of both the buyer and the seller. This ensures both parties understand the reduced level of advocacy they receive and agree to the arrangement.
Why the other options are wrong
- A. A dual agent cannot advise either party on the 'appropriate' price, as this would inherently favor one party over the other, violating the agent's limited fiduciary duties to both.
- B. Consent must be in writing, not merely oral and documented, to be legally valid for dual agency.
- C. Dual agency is legal in California, provided strict disclosure and consent requirements are met.
California Dual Agency
In California, dual agency occurs when one real estate broker (or their associated licensees) represents both the buyer and the seller in the same transaction, requiring specific disclosures and the informed written consent of both principals.
- Permitted if strict rules are followed.
- Requires informed written consent from both parties.
- Limits the agent's ability to advise on price or terms that would favor one party.
Memory trick: Dual means two, both must know, write it down, and let it show.