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When working in the real estate industry, it is crucial for brokers to understand the different types of agency agreements they can enter into with clients. One of the most common types of agency agreements is a single agency agreement, which establishes a fiduciary duty between the broker and the client. However, not all parties are eligible to enter into these agreements. In this article, we will explore the exceptions to single agency agreements for brokers.

First, let us define what a single agency agreement is. A single agency agreement is a type of agency agreement in which the broker exclusively represents the client in a real estate transaction. This means that the broker is obligated to act in the client`s best interests and must keep all confidential information regarding the transaction private. The broker cannot share any information with the other party that could potentially harm their client`s position.

With that in mind, there are certain exceptions to who can enter into these agreements with brokers. A broker cannot enter into a single agency agreement with any of the following:

1. Another broker or real estate professional – A broker cannot enter into a single agency agreement with another broker or real estate professional. This is because they have a fiduciary duty to their own clients and cannot represent another party simultaneously.

2. An unrepresented party – A broker cannot enter into a single agency agreement with an unrepresented party. This is because the broker cannot provide adequate representation to both parties in the transaction.

3. An entity – A broker cannot enter into a single agency agreement with an entity, such as a corporation or LLC. Instead, they must enter into a different type of agency agreement, such as a dual agency agreement or a non-agency agreement.

4. A client with conflicting interests – A broker cannot enter into a single agency agreement with a client who has conflicting interests. For example, if a broker represents both the buyer and seller in a transaction, they cannot enter into a single agency agreement with either party.

In conclusion, single agency agreements are a vital component of the real estate industry. However, brokers must be aware of the exceptions to these agreements. Brokers cannot enter into a single agency agreement with another broker or real estate professional, an unrepresented party, an entity, or a client with conflicting interests. By understanding these exceptions, brokers can provide the best representation possible to their clients and promote a fair and ethical real estate industry.

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