Which statement best describes dual agency?

Which statement best describes dual agency?

• A. Dual agency occurs when one licensee represents both the buyer and the seller in the same transaction.
• B. Dual agency is prohibited in all NS transactions.
• C. Dual agency means the broker also represents the lenders.
• D. Dual agency occurs when two different licensees represent the buyer and seller.

Answer: (A)

Dual agency means one licensee represents both the buyer and the seller in the same transaction. This setup directly describes the situation where a single licensee owes fiduciary duties to both clients, which can create conflicts of interest. Because of that potential conflict, disclosure and written consent from both parties are essential, and the licensee must remain neutral rather than advocate for one side exclusively. The other statements don’t fit the concept: representing lenders is a different party option and isn’t dual agency; dual agency isn’t universally prohibited in NS transactions—it requires proper disclosure and consent when allowed; and two different licensees representing each side describes a different arrangement (often called designated or two-agent representation within the same brokerage), not the single-licensee dual agency.

Dual agency means one licensee represents both the buyer and the seller in the same transaction. This setup directly describes the situation where a single licensee owes fiduciary duties to both clients, which can create conflicts of interest. Because of that potential conflict, disclosure and written consent from both parties are essential, and the licensee must remain neutral rather than advocate for one side exclusively.

The other statements don’t fit the concept: representing lenders is a different party option and isn’t dual agency; dual agency isn’t universally prohibited in NS transactions—it requires proper disclosure and consent when allowed; and two different licensees representing each side describes a different arrangement (often called designated or two-agent representation within the same brokerage), not the single-licensee dual agency.