Dual Agency

Dual agency occurs when a broker or firm attempts to represent both parties in a transaction simultaneously, creating an inherent conflict of interest. In Texas, common-law dual agency was outlawed and replaced entirely by the statutory Intermediary process.

Texas-Specific Nuance & Citation

According to TRELA §1101.561, a real estate license holder in Texas is strictly prohibited from acting as a dual agent. The statute specifies that a broker may only represent both parties to a transaction if they act as an authorized statutory intermediary.

The Trap

Many candidates assume that “intermediary” and “dual agency” are the exact same thing. They are not. Dual agency is illegal because it doesn’t have the clear, statutory guidelines and consent requirements that Texas’s Intermediary law mandates to protect consumers.

Worked Example

A broker in Lubbock represents a seller. A buyer who doesn’t have an agent asks the broker to write an offer. If the broker represents both parties without executing a written Intermediary agreement, they are practicing illegal dual agency and are subject to license revocation.