Why might dual agency be restricted in many jurisdictions?

Why might dual agency be restricted in many jurisdictions?

• A. Because it can compromise fiduciary duties due to conflicts of interest; restrictions are in place to protect clients.
• B. Because it increases broker commissions.
• C. Because it reduces market competition.
• D. Because it simplifies transactions.

Answer: (A)

Dual agency is about one licensee representing both the buyer and the seller in the same transaction, which can create a conflict of interest for that agent. Fiduciary duties require loyalty, confidentiality, full disclosure, and prioritizing a client’s interests. When the same broker must serve two clients with potentially opposing goals, they can’t fully advocate for one side without risking the other. That tension is what prompts restrictions or careful rules in many places, often requiring clear disclosure and informed consent or even separate representation for each side to protect clients. The other choices miss the core issue: commissions, competition, or simplified transactions aren’t the primary reason these rules exist.

Dual agency is about one licensee representing both the buyer and the seller in the same transaction, which can create a conflict of interest for that agent. Fiduciary duties require loyalty, confidentiality, full disclosure, and prioritizing a client’s interests. When the same broker must serve two clients with potentially opposing goals, they can’t fully advocate for one side without risking the other. That tension is what prompts restrictions or careful rules in many places, often requiring clear disclosure and informed consent or even separate representation for each side to protect clients. The other choices miss the core issue: commissions, competition, or simplified transactions aren’t the primary reason these rules exist.