Dual agency is the act of representing two principals to a transaction at the same time and requires equal loyalty to both.

• A. Is illegal in all states.
• B. Means the broker owes duties only to the buyer.
• C. Is the act of representing two principals to a transaction at the same time and requires equal loyalty to both.
• D. Automatically absolves the broker of confidentiality.

Answer: (C)

Dual agency means one broker or brokerage represents both sides of a transaction, so each client’s interests must be respected simultaneously. Because the buyers and sellers often have conflicting goals, the broker owes equal loyalty to both and must treat each client fairly, avoid favoring one party, and maintain confidentiality for both. In practice, this arrangement typically requires the informed written consent of both parties and a clear disclosure of what dual agency entails. The broker must still uphold duties like honesty and fiduciary responsibility to each client, including protecting confidential information unless disclosure is legally required or authorized. If a conflict becomes too real to manage, the broker should adjust the agency setup or withdraw to protect the interests of the clients.