Find the right lawyer now

Dual Representation in Real Estate Transactions

Find a Local Real Estate Lawyer near You

What are Real Estate Transactions?

Real estate transactions occur when real property is being bought or sold.  Sales of real property are very common and are often the biggest transaction of an individual’s life.

Fiduciary Duties in Real Estate Transactions

A fiduciary duty arises in certain relationships such as attorney-client, broker-client, and in other professional-client relationships. Fiduciary duties require that one party put their client’s interests ahead of everyone else.  Fiduciary duties create problems when two parties believe one professional has their best interest in hand. When this occurs a dual representation issue may be present.

Why Dual Representation is a Problem

Dual representation is a problem because a professional’s fiduciary duty cannot be completely satisfied if there are two parties with opposing interests such as a buyer and seller in a real estate transaction. Furthermore, generally when only one professional is involved in a transaction only one parties fiduciary interests are protected and not both, but the other party may not know the professional does not have their best interest in hand.

Dual representation can create a problem in a real estate transaction because there will be a buyer, seller, and possibly a broker as well as a closing attorney. Generally the broker and attorney owe a fiduciary duty to the seller and not the buyer. Therefore, when the seller and buyer enter into a transaction the broker and attorney will do everything they legally can to ensure the seller gets the best deal possible while the buyer gets the worst deal legally possible.

How Do I Know if the Attorney or Broker I am Working With Owes me A Fiduciary Duty?

You can ask the professional for clarification, but as a general rule if you hired the person they owe you a fiduciary duty. For example if you contacted an attorney for the transaction and you are paying the attorney then the attorney will owe you the fiduciary duty. If on the other hand you enter in the agreement and the other party provides an attorney for you to interact with you will not have the fiduciary relationship with that attorney.

Should you Consult an Attorney if you are Involved in a Real Estate Transaction?

If the professional in the transaction does not owe you a fiduciary duty you should consult a real estate attorney prior to finalizing the deal. The reason for this is the attorney you retain will owe you a fiduciary duty and inform you of any pitfalls in the agreement. Once these pitfalls are identified your attorney can negotiate these unfavorable terms with the other side to ensure a fair deal is reached. Since this is often the biggest transaction of many people’s lives consulting an attorney before finalizing the deal is generally a good idea.

Photo of page author Ken LaMance

, LegalMatch Law Library Managing Editor and Attorney at Law

Last Modified: 07-25-2018 07:07 PM PDT

Law Library Disclaimer
  • No fee to present your case
  • Choose from lawyers in your area
  • A 100% confidential service
What is LegalMatch?

We've helped more than 4 million clients find the right lawyer – for free. Present your case online in minutes. LegalMatch matches you to pre-screened lawyers in your city or county based on the specifics of your case. Within 24 hours experienced local lawyers review it and evaluate if you have a solid case. If so, attorneys respond with an offer to represent you that includes a full attorney profile with details on their fee structure, background, and ratings by other LegalMatch users so you can decide if they're the right lawyer for you.