Can a Real Estate Broker Act as a Dual Agent in Texas?

Dual agency is one of the most critical concepts on the Texas licensing exam. Many general national study guides teach dual agency as an option, but Texas law explicitly forbids it.

Why the Correct Option is Right

Option B is correct because TRELA strictly prohibits common-law dual agency. Brokers must use the statutory Intermediary Relationship if they intend to facilitate a transaction between a buyer and a seller whom they both represent. This requires written consent from both parties (usually via the Listing Agreement and Buyer Representation Agreement).

Why the Other Options are Traps

• Option A is a trap because dual agency disclosure agreements are invalid in Texas. There is no such thing as “disclosed dual agency” under TRELA.
• Option C is a trap because the prohibition on dual agency applies to all real estate transactions in Texas, including commercial and residential.
• Option D is a trap because while a broker can choose to represent only one party, they are not legally restricted from representing both, provided they act as a statutory intermediary.

The Exam Trap

Watch out for national-level practice questions that treat dual agency as legal. In Texas, the only legal way to handle an in-house transaction is through an Intermediary relationship.

Worked Texas Example

Scenario: Broker Jane is contacted by Larry, who wants to buy a home listed by Jane’s seller-client, Mary. Larry wants Jane to represent him as well. Jane has them both sign a general “Dual Agency Consent” form she found online. Outcome: Jane has violated TRELA by engaging in illegal dual agency. She should have established an Intermediary relationship using a TREC-compliant written agreement and decided whether to appoint separate license holders to each party.