Dual Agency and Representation Duties
Dual agency is the highest-risk representation question on this exam and the one most likely to appear as a scenario. The exam wants to see whether you can spot the conflict, disclose it properly, obtain enforceable consent, and then actually behave neutrally.
When it arises
The same brokerage represents both sides of one transaction - seller and buyer, or two competing buyers for one property. It also arises where a registrant in the brokerage has a personal interest in the property. Saskatchewan permits it only with the informed, written consent of every client, given after full written disclosure of the conflict and its consequences.
What proper consent looks like
- Written disclosure of who the brokerage acts for, what will not be disclosed, and how confidentiality will be protected.
- Consent signed by both clients before the brokerage starts acting for the second one, and specific to that transaction.
- Advice to each client to obtain independent legal advice.
- A record that either client may withdraw consent, after which the brokerage must stop acting for one of them.
Behaviour during a dual agency
No confidential information passes between the clients - motivation, price ceiling, deadline pressure or financial position. No advocacy or negotiating preference for either side. No using one client’s information to draft or shape the other’s offer. Both clients receive the same honest advice, including a recommendation to get independent advice on price. If the conflict becomes unmanageable, refer one client out.
Worked example
A brokerage has the listing and a buyer client who wants to write on it. The listing salesperson knows the seller will accept $12,000 below list. Consent is signed, and the same salesperson drafts the buyer’s offer at $12,000 below list “because that will get it done”. Even with consent, that uses confidential information and is a discipline matter. The offer must be the buyer’s decision; the seller’s bottom line stays with the seller.
Traps
- Verbal consent, or a consent form signed at closing.
- Consent that never explains what the brokerage will not disclose.
- Assuming dual agency licenses a free flow of information.
- Forgetting that material-fact disclosure is still owed on the customer side.
- Failing to disclose how the brokerage is paid on both sides, and any referral fee.