Agency Relationships, Fiduciary Duties, and Disclosures
The disclosure trigger
Minnesota requires a written agency disclosure at the first substantive contact and before signing any listing agreement or buyer representation agreement. The disclosure explains the available agency relationships and whom the licensee represents.
Types of relationship
- Seller's agent (listing broker): owes loyalty, confidentiality, disclosure, obedience to lawful instructions, accounting, and reasonable care and skill.
- Buyer's agent: mirrors those duties toward the buyer.
- Dual agent: the same broker represents both parties. Minnesota permits it only with informed written consent. A dual agent may not advocate for either side and may not disclose one party's confidential information to the other.
- Facilitator / no agency: assists the parties without representing either; no fiduciary duty attaches.
Worked example
Priya, a buyer's agent, learns her client would pay up to $340,000 for a home listed at $319,000. Priya's colleague in the same brokerage holds the listing. Because a single broker now represents both parties, this is dual agency: written consent is required, and Priya must not reveal the buyer's ceiling or push the buyer toward list price. She presents the offer and lets the parties negotiate.
Traps that cost marks
- Treating a facilitator as a fiduciary.
- Believing dual agency relaxes confidentiality - it never permits disclosure of price motivation.
- Forgetting that confidentiality survives termination of the agency.
- Assuming two agents at different firms create dual agency (they do not; two agents at one firm do).