This document provides an overview of dual agency and brokerage relationships under Massachusetts law. It defines key terms like agency, principal, client, and fiduciary. It explains the requirements for dual agency, including obtaining written consent from both buyer and seller. A dual agent's duties are to treat both clients honestly and impartially by disclosing defects and presenting all offers. The document outlines different types of brokerage relationships like seller agency, buyer agency, and designated agency. It also discusses proper disclosure of relationships and compensation methods.

2. Dual Agency in Massachusetts
Bob Falter, Ph.D.
GRI, ABR, SRES, e-PRO, LMC, SFR, BPOR
Produced by Paula K. Savard

3. Dual Agency in Massachusetts
• An individual agrees to
represent both the
buyer and the seller in
the same transaction.
• Buyer and Seller must
each have knowledge of
dual representation and
consent to it in writing.
• The individual agent is a
dual agent.
• The firm with whom the
individual agent is
associated is a dual
agent.

4. License Law now designed to
• Identify that dual agency exists.
• Provide guidance to licensee on how to
function as a dual agent.
• achieve informed written consent to dual
agency.
• Explain dual agency to the public.

5. Statute and Regulation
• Legislature made the law.
• Board of Registration of Real Estate Brokers
and Salesman made and enforces the specific
regulations regarding licensees.
• However you choose as your way of doing
business, and your BROKER’S choices are
specifically described in the regulations.

6. History of Brokerage Relationships in
Massachusetts
• Statute of Massachusetts Law Chapter 112
Section amended with new section 87AAA ¾.
• a. Disclosure Applies to 1-4 residential.
• b. may act as a dual agent.
• c. may act as a designated agent.

7. History of Real Estate Relationships, Board of
Registration of Real Estate Brokers and Salesmen
REGULATIONS
• 1960’s Licensure… Grand fathered existing
practitioners.
• 1990 Disclosure.. Unless otherwise agrees all broker
and salespersons represent the seller.
• 1993 Disclosure.. Seller Agency, Buyer Agency, Dual
Agency with informed consent. Each relationship is
the responsibility of every licensee in the firm.

8. History of Real Estate Relationships, Board of
Registration of Real Estate Brokers and Salesmen
Regulations
• 2005 Disclosure… Seller agency, Buyer Agency, Dual
Agency with informed consent, Designated Agency,
Facilitator.
• Does everyone in the firm have a fiduciary duty to
advocate for each and every client of the firm? OR
• Does the individual agent and their supervising
broker have the fiduciary duty to advocate for their
designated client?

9. Sample Placard for Open House
• Our firm proudly represents the seller of this property.
• We can offer you buyer representation as well.
• If you are currently represented by your own agent, when you
sign in, please leave your agent’s name and phone number as
well as your own name.
• 254 CMR 3.00(13)(a)(3) at an Open House the RE licensee
must conspicuously post and/or provide with other written
materials any relationship so that the attendees can
understand the relationship they may have with the licensee
conducting the open house.

10. LICENSE LAW DEFINITIONS
• AGENT - one who represents the interests of
another (principal or client or real estate
broker).
• PRINCIPAL - commonly known as the person
who engages the agent for representation.
• CLIENT - A person who has empowered
another to act as his/representative.

11. LICENSE LAW DEFINITIONS
• Client relationship = fiduciary relationship
• Fiduciary relationship requires agent to put
principals interest first above all others.
Fiduciary requires confidentiality, obedience
to lawful instruction, loyalty, accountability
and diligence.

12. LICENSE LAW DEFINITIONS
• CUSTOMER - a person without
representation involved in a transaction. All
agents have a duty to treat customers fairly.
• Neither clients nor customers are bound by
the license laws or the code of ethics.
• VICARIOUS LIABILITY - liability created not
because of a persons actions, but because of
the relationship between the libel person and
other parties.

13. LICENSE LAW DEFINITIONS
• Example of Vicarious Liability: Real estate Broker is
vicariously libel for the act of their salespeople while
the salesperson is acting on behalf of the broker
even if the broker did nothing to cause the liability.
• Informed Consent: Consent to certain act, this is
given after a full and fair disclosure of all the facts
needed to make a conscientious choice.

14. LICENSE LAW DEFINITIONS
• Fiduciary - A relationship that implies a position of
trust or confidence where in one person is usually
entrusted to hold or manage property or money of
another.
• Term fiduciary describes the faithful relationship
owed by broker (and salesperson) to a principal
• Fiduciary owes complete allegiance to the client.

15. ESTABLISHMENT OF AGENCY
• EXPRESS WRITTEN CONTRACT WHERE AGENT AND
PRINCIPLE AGREE TO TERMS.
• EXPRESS ORAL CONTRACT WHERE AGENT AND
PRINCIPLE AGREE TO TERMS.
• IMPLIED AGENCY.. YOU ACTED LIKE AN AGENT OR
SPOKE LIKE AND AGENT, THEREFORE, YOU ARE AN
AGENT.

16. Agents Obligations “OLD CAR”
• Obedience - agent must carry out lawful
instructions of the client.
• Loyalty - agent must act in the best interest of
the client.
• Disclosure - all information relevant to the
transaction must be given to the client.

17. Agents Obligations “OLD CAR”
• Confidentiality - agent has a duty to keep
client’s information or discussions
confidential. This duty survives the
termination of the agency relationship. This
duty does not apply to legally required
disclosures such as know physical or
hazardous conditions in the property.

18. Agents Obligations “OLD CAR”
• Accountability - agent must protect and
account for all money.
• Reasonable Care and Due Diligence - agent
must act competently, capable of performing
duties within the scope of the licensing
requirements.

19. Brokerage Relationships and
Duties for Each
• SELLER AGENCY. Real estate agents
represents the seller as a client and treats the
buyer as a customer.
• SELLER AGENTS duties to seller include
• OLD CAR… obedience, loyalty, disclosure,
confidentiality, accountability and reasonable
card and due diligence.

20. Brokerage Relationships and
Duties for Each
• Seller Sub Agency
•
That the broker may cooperate
with another broker who is then
a sub agent of the seller. Further,
that vicarious liability is the
potential for a misrepresentation
or an act or omission of the sub
agent and that the seller
authorizes the broker or
salesperson to offer sub agency.
•
•
•
Seller has expressly authorized
his agent to use other agents to
market the seller’s property.
Specific legal requirements to
offer sub agency.
Consent must be obtained at the
execution of an agreement to sell
with the seller.

21. Brokerage Relationships and
Duties for Each
• Vicarious liability.
• Under sub agency is the
potential for a seller or
buyer to be held liable for
an act or omission of the
sub agent.
• subagents duties to the
client include OLD CAR
• Except in the instance of
DUAL AGENCY the subagent
assumes the same split
loyalty as the principal
agent..

22. Brokerage Relationships and
Duties for Each
• Buyer Agency
• Duties include
Confidentiality
Obedience
Accountability
Loyalty
Disclosure, Diligence
and Reasonable Care
• Real estate agent
represents the buyer

23. Brokerage Relationships and the
duties of each
• Dual Agency
• Agent assists both parties
• Agent is neutral and unable
to advocate for either the
seller or the buyer with
regard to any conflicting
interest.
• Represents seller client and
buyer client in the same
transaction
• Has WRITTEN informed
consent of both the
seller and the buyer
• Maintains Confidentiality of
Material Information
• Is Accountable for funds

24. Brokerage Relationships and the
duties of each
• NON AGENT OR TRANSACTION BROKER
(SALESPERSON)
• Facilitator works to complete the transaction.
• Facilitator is bound by license law and Chap 93
A, but has no fiduciary relationship to buyer or
seller.

25. Brokerage Relationships and the
duties of each
• Facilitator must disclose all know material
defects in the property.
• Facilitator duties consist of accounting for
funds, and other facilitator duties undertaken.
• A accountability is the only duty under
Massachusetts license law.. Brokerage
Relationships and the duties of each.

26. Brokerage Relationships and the
duties of each
• Designated Agent - A real estate licensee who
has been specifically designated by the broker
with whom they are affiliated to represent the
buyer or the seller in a transaction
• Buyer or Seller client must agree.

27. When does Dual Agency Occur?
• Two different agents
from the same firm
represent both the
buyer and the seller in a
transaction.
• Traditional agency
business model.. In
house transaction.
• In such companies, even
though the listing agent
represents the seller and
the buyer’s agent
represents the buyer, both
agents and their firm are
dual agents since agency
duties have not been
restricted to individuals.

28. When does Dual Agency Occur?
• When a brokerage firm is
authorized to appoint
different individuals as
designated seller’s agents
and designated buyer’s
agents, respectively, and
their clients get into the
same transaction.
• The appointing Agent
becomes a dual agent.

29. Disclosure and Consent
• Mandatory Agency
Disclosure is vehicle for
licensees to disclose the
agency relationship to
Buyers and Sellers.
• It also provides a
definition of dual
agency.
• Consent to dual agency
is a separate step.

30. Disclosure and Consent
• Under Massachusetts law, advance consent
may be obtained in a listing agreement or a
buyer agency agreement or in a separate
consent form.
• Written consent must be obtained prior to
signing a written agreement for purchase.
• A sample consent form is in your packet.

31. Duties of a Dual Agent
• Treat both clients honestly.
• volunteer disclosure of known material defects to
the buyer.
• provide market information available from a
property listing service or public records, if
requested.
• prepare and present all offers and counteroffers at
the direction of the parties.

32. Consent Forms for Dual Agency
• Consent may be obtained in
listing or representation
agreement.
• Stand alone consent form
• If Consent is obtained prior
to occurrence, “Notice of
Dual Agency” must be
provided prior to offer.
•
•
•
Consent forms must be signed by
buyer and seller and broker or
salesperson: however signatures
may appear on separate forms.
Consent forms must be kept a
minimum of (three ) 3 years.
Process for Dual Agency: 1)
Disclosure, 2) Consent, 3) Notice
(if applicable).

33. WHEN CONSENT SHOULD BE
OBTAINED
• BEFORE THE TRANSACTION IS IDENTIFIED in
listing agreement or buyer agency agreement.
• If this is done, SUBSEQUENT NOTICE OF
OCCURRENCE with offer, is required.
• Consent must be obtained before the
Occurrence of Dual Agency but no later than
the execution of an Offer to Purchase.

34. What can a Dual Agent do for BUYERS AND
SELLERS
• Objective is equal treatment and Neutrality for both
Seller and Buyer.
• Treat Seller and Buyer with honesty and accuracy
• Provide helpful information and description about
property to the Buyer.
• Disclose all material fact about the property to the
Buyer.

35. What can a Dual Agent do for BUYERS AND
SELLERS
• Explain Real Estate Terminology and
Procedures.
• Provide licensed Property Inspectors List.
• Assist the Buyer with financing Options.
• Provide Public Record information, CMA
(same one to both Buyer and Seller).
• Assist in Preparation of Offer to Purchase.

36. What can a Dual Agent do for BUYERS AND
SELLERS
• Explain Consensual Disclosed Dual Agency as it
relates and compares to other Agency
Relationships.

37. A Dual Agent Should NOT
• Disclose confidential (information about people, motivation )
information received from either party, except:
• if disclosure is expressly authorized,
• if such disclosure is required by law,
• if such disclosure is intended to prevent illegal conduct,
• if such disclosure is necessary to prosecute a claim against a
person represented or to defend a claim against the broker or
salesperson.

38. A Dual Agent Should NOT
• Disclose that a buyer will pay a price or agree
to terms other than those in the Offer, or that
a Seller will accept price or terms other than
those in the listing.
• Engage in conduct that is contrary to the
instructions of either party
• Dual agents should separate information on that
transaction from other agents in the office.

39. How to Disclose Agency at an Open
House
• No individual notice is required to be provided
to people attending.
• Agent disclosure by sign, poster, or distributed
listing literature or property description form
conspicuously and discloses any pre-existing
agency relationship.

40. How to Disclose Agency at an Open
House
• On such distributed material, the disclosure
shall be more conspicuous than on any other
written material.

41. Other Requirements of a Dual
Agent
• All agents must, by law, present property
honestly and accurately.
• Must disclose all know material facts related
to the real estate.
• Must comply with License Law and 93A.
• Must comply with MA and Fed Lead Paint
Law.

42. COMPENSATION METHODS
•
•
•
•
•
COMMISSION BASED ON SALES PRICE
FLAT FEE
FEE FOR SERVICE/MENU OPTIONS
MONEY CREDITED TO SELLER AT CLOSING
Entitlement to compensation is not created by the
agency relationship