Key Takeaways
- New Jersey permits dual agency only with written informed consent from both parties
- In dual agency, the agent cannot disclose confidential information from either party to the other
- Transaction brokerage allows a licensee to facilitate without representing either party
- Designated agency is permitted where different licensees in the same firm represent each party
- All agency relationships must be disclosed and documented in writing
Dual Agency and Transaction Brokerage in New Jersey
New Jersey permits both dual agency and transaction brokerage, but each has specific requirements.
Dual Agency
Dual agency occurs when one licensee or brokerage represents both the buyer and seller in the same transaction.
Requirements for Dual Agency
| Requirement | Description |
|---|---|
| Written consent | Both parties must consent in writing |
| Disclosure | Full explanation of dual agency implications |
| Neutrality | Agent must not favor either party |
| Confidentiality | Cannot share one party's confidential info with other |
Dual Agent Limitations
When acting as a dual agent, the licensee:
CAN:
- Facilitate communication between parties
- Assist with paperwork
- Provide market information
- Help both parties understand the process
CANNOT:
- Disclose seller's bottom line to buyer
- Disclose buyer's maximum price to seller
- Advocate for one party over another
- Share confidential strategy or motivation
Information Dual Agents Cannot Disclose
| From Seller | From Buyer |
|---|---|
| Lowest acceptable price | Highest price willing to pay |
| Motivation to sell | Motivation to purchase |
| Willingness to accept terms | Willingness to offer more |
| Financial situation | Financial qualifications beyond what buyer authorizes |
Exam Tip: Dual agency is legal in New Jersey but requires careful handling. Both parties must understand they are giving up full representation.
Transaction Brokerage
Transaction brokerage is a relationship where the licensee assists both parties without representing either.
Transaction Broker Role
| Characteristic | Description |
|---|---|
| Representation | Neither party is represented |
| Advocacy | No duty to advocate |
| Duties | Honest dealing, facilitate transaction |
| Disclosure | Must disclose relationship type |
Transaction Broker Duties
A transaction broker must:
- Deal honestly with all parties
- Disclose material facts about the property
- Account for all funds
- Exercise reasonable care
- Present all offers
- Keep parties informed
A transaction broker does NOT:
- Owe fiduciary duties to either party
- Negotiate on behalf of either party
- Provide confidential advice
- Advocate for either party's interests
Designated Agency
Designated agency allows different licensees within the same brokerage to represent different parties.
How Designated Agency Works
| Element | Description |
|---|---|
| Assignment | Broker designates specific agents |
| Representation | Each agent represents only their assigned party |
| Confidentiality | Agents keep information confidential |
| Supervision | Broker supervises but doesn't represent |
Benefits of Designated Agency
- Clients receive full representation
- Avoids dual agency limitations
- Agents can advocate for their clients
- Confidentiality is maintained
Requirements
- Written consent from both parties
- Clear designation of agents
- Broker cannot be a designated agent
- Proper documentation
In New Jersey dual agency, what can the dual agent disclose?
What is transaction brokerage in New Jersey?
In designated agency, can the supervising broker be one of the designated agents?