When is dual agency considered illegal?

Dual agency is considered illegal when there is no written consent between the parties involved. In the context of real estate transactions, dual agency occurs when a single agent represents both the seller and the buyer. To ensure that all parties are aware of and agree to this arrangement, Maryland law requires that written consent be obtained from both the buyer and the seller. Without this consent, the agent cannot fulfill their fiduciary duties to both parties effectively, thus creating a conflict of interest that undermines trust and transparency.

The other options do not accurately reflect the legal parameters defining when dual agency becomes problematic. For instance, not having formal agreements in place between the parties does not inherently make dual agency illegal; it may simply indicate the need for proper documentation. The type of property involved, such as whether it is a rental or a sale, also does not affect the legality of dual agency as long as the necessary written consents are in place. Additionally, a prior relationship between a party and the agent does not invalidate dual agency unless it compromises the agent’s ability to remain impartial, which is again regulated by the requirement for written consent.