What does 'dual agency' mean in real estate?

Dual agency in real estate refers to the scenario where a single agent represents both the landlord and the tenant in a leasing transaction. This arrangement is significant because it creates a unique situation where the agent must navigate the interests of both parties, which can sometimes be conflicting. In this role, the agent has fiduciary duties to both the landlord and the tenant, meaning they must act in the best interests of both sides. However, this can be challenging, as it may be difficult for the agent to maintain confidentiality and prioritize the needs of each party equally.

The concept of dual agency is important to understand, especially in states where it is legal, as it requires the agent to have clear communication and full disclosure with both parties about any potential conflicts of interest. Dual agency arrangements often require written consent from both the landlord and the tenant, ensuring that all parties are aware of the arrangement and agree to it.

The other options do not accurately describe dual agency; having two agents represent a single landlord, a relationship between two tenants, or a property management agreement are different concepts within real estate practice and do not encompass the dual representation aspect that is central to the definition of dual agency.