Dolgetta Law

Mutually Dependent Transactions and the Creation of Dual Agency

The Department of State has for many years published a series of Legal Memoranda, one of which (Legal Memorandum LI12) is entitled “Be Wary of Dual Agency”. The Memorandum discusses the nature of dual agency. It essentially discourages consumers from dual agency because of the loss of the undivided loyalty of the agent first hired by the consumer. The Memorandum reflects the longstanding disdain of the New York State Department of State to dual agency which emanated from views expressed by the legal staff of the Secretary of State during the 1980s.

Legal Memorandum LI12 includes the following paragraph:

“Dual agency can also arise in a more subtle way: A real estate broker who represents the seller procures a prospective purchaser who needs to sell her property before she is able to buy the seller’s property. The prospective purchaser then signs a listing agreement with the real estate broker to sell her property so that she can purchase the seller’s property. The real estate broker is now a dual agent representing both parties in a mutually dependent transaction.”

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