I recently obtained a full dismissal of all charges brought by the Nevada Real Estate Division (NRED) against one of my clients for alleged violations of Nevada broker licensing laws. In my opinion, NRED was reaching on a number of issues, and was bowing to some uneducated political pressure by bringing the cases in the first place. My client was not the only broker or agent subjected to these charges and it bears noting that most of the cases were fully dismissed before hearings (including that of my client), two after a hearing and another two cases are pending judicial review. There were a number of important issues at stake in these cases. One of which was the propriety of dual agency.
Dual Agency refers to the situation in which the same real estate agent represents both the seller and the buyer in a real estate transaction. Dual Agency is legal in Nevada, however, under NRS 645.252, if an agent acts on behalf of more than one party to the transaction they must obtain written consent from each party which must include: (i) a description of the real estate transaction; (ii) a statement the agent is acting for two or more parties who have adverse interests and that in acting for those parties the agent has a conflict of interest; (iii) a statement that the agent will not disclose confidential information for 1 year after the transaction unless compelled by a court to do so or given written permission by the party to do so; (iv) a statement that the party is not required to consent to the dual agency and v) a statement that the party is not being coerced into consenting and understands the terms of the consent. NRED has prescribed forms for these disclosures.
Where a broker assigns two different agents, who both work under the same broker, to a single transaction, this is not referred to as dual agency and does not require the same disclosures as set forth above.
Dual Agency representation by realtors is a practice that may be questionable in, or outside of, the context of short sales because of the inherent conflicts of interest. The policy implications are significant to the protection of buyers and sellers.
Regardless, it is legal in the state of Nevada and neither our legislature nor the local realtor boards have sought to make changes to this practice. As with many aspects of contracts, and law in general, parties to a transaction or contract are advised to be aware of their rights and what they are contracting for.