A "dual agent” is any real estate agent (or multiple agents from the same company) who represents both parties in the same transaction (think “double agent” for the true meaning). When this occurs a “dual agency” exists. Dual agency is the real estate industry’s dirty little secret and should never be tolerated by a commercial tenant or buyer. Here’s why: In practice, early in the process of looking for space to lease or property to purchase, tenants and buyers typically divulge confidential information to the real estate agent they perceive is representing their interests. This information can include how much they are willing to pay, when they need space, their target area, and other factors that, if known to potential property owners, would serve to dilute their negotiating leverage. Only when a lease or purchase contract is presented for them to sign do they discover the agent has also been representing the property owner. At that point it is generally too late to renegotiate the terms of the transaction, and the tenant or buyer may have run out of time to find alternate space.

Because a dual agency always favors the property owner (and self-dealing real estate agent, who will collect the entire commission), real estate agents desiring to act as a dual agent must disclose his or her fiduciary status at the time of the initial meeting or conversation with each party and obtain written permission to the arrangement from each. If the agent fails to properly inform both parties of his/her fiduciary status in a timely manner an undisclosed dual agency exists, which is viewed as an unethical practice and, if reported, subjects the agent, or agents, to possible disciplinary action by the Department of Real Estate.