On July 14, 2018 a
Exhibit,Appendix
was filed
involving a dispute between
Ellyn Berk,
Pamela Goldstein,
Paul Benjamin,
Tony Berk,
and
Houlihan Lawrence Inc.,
for Commercial Division
in the District Court of Westchester County.
Preview
FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 58 RECEIVED NYSCEF: 07/14/2018
FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018
7/3/2018 Officeof GeneralCounsel
NYSCEF DOC. NO. 58 RECEIVED NYSCEF: 07/14/2018
DEPARTMENT OF STATE,C}FFICE OF
GENERAL COUNSEL
ANDREW AECOOMO, OVERNOR. ROREANAROEADO E REAREOF A.E
Legal Memorandum LI12
BE WARY OF DUAL AGENCY
With the growing number of very large and widespread brokerages, the issue of dual agency arises more frequently
than ever before. Any purchaser, seller, lessor or lessee confronted with a dual agency issue by their real estate
agent should not take the issue lightly. Parties to a real estate transaction, including real estate brokers and
salespersons themselves, seldom realize the inherent problems of a real estate agent acting as a dual agent.
Dual agency arises when a real estate broker or salesperson represents adverse parties (e.g., a buyer and seller) in
the same transaction.
Dual agency typically arises in the following way: a real estate broker employs two salespeople, one who works for
the buyer as a buyer's agent and the other who works for the seller as a seller's agent. The real estate broker and
same" buyer'
his salespeople are "one and the entity when analyzing whether dual agency exists. As soon as the buyer's
agent introduces the buyer to property in which the seller is represented by the seller's agent, dual agency arises.
Dual agency can also arise in a more subtle way: A real estate broker who represents the seller procures a
prospective purchaser who needs to sell her property before she is able to buy the seller's property. The prospective
purchaser then signs a listing agreement with the real estate broker to sellher property so that she can purchase the
seller's property. The real estate broker is now a dual agent representing both parties in a mutually dependent
transaction.
When you employ a real estate broker or salesperson as your agent, you are the principal. "The relationship of agent
and principal is fiduciary in nature, '...founded on trust or confidence reposed by one person in the integrity and
another.'
fidelity of (citation omitted) Included inthe fundamental duties of such a fiduciary are good faith and
undivided loyalty, and fulland fairdisclosure. Such duties are imposed upon real estate licensees by license law,
rules and regulations, contract law, the principals of the law of agency, and tort law. (citation omitted) The object of
these rigorous standards of performance isto secure fidelity from the agent to the principal and to insure the
omitted)."
transaction of the business of the agency to the best advantage of the principal. (citations (Emphasis
added) DOS v. Moore, 2 DOS 99, p. 7 (1999)
"A real estate broker is strictly limited in his or her ability to act as a dual agent: As a fiduciary, a real estate broker
is prohibited from serving as a dual agent representing parties with conflicting interests in the same transaction
without the informed consent of the principals. (citations omitted) 'Ifdual interests are to be served, the disclosure
significance.'
to be effective must lay bare the truth, without ambiguity or reservation, in allits stark (citation
omitted)
'Therefore, a real estate agent must prove that prior to undertaking to act either as a dual agent or for an
adverse interest, the agent made fulland complete disclosure to all parties as a predicate for obtaining the
consent of the principals to proceed in the undertaking. Both the rule and the affirmative [defense] of full
law.' omitted)"
disclosure are well settled in (citation / . atpp. 9-10.
In a purchaser/seller transaction in which dual agency arises, the agent must not only clearly explain the existence of
the dual agency issue and its implications to the parties, the agent must also obtain a written acknowledgment from
the prospective purchaser and seller to dual agency. That acknowledgment requires each principal signing the form
to confirm that they understand that the dual agent will be working for both the seller and buyer, that they
understand that they may engage their own agent to act solely for them, that they understand that they are
giving up their right to the agent's undivided loyalty, and that they have carefully considered the possible
consequences of a dual agency relationship.
The fiduciary duty of loyalty that your real estate agent owes to you prohibits your agent from advancing any
interests adverse to yours or conducting your business to benefit the agent or others.
Significantly, by consenting to dual agency, you are giving up your right to have your agent be loyal to you, since
your agent isnow also representing your adversary. Once you give up that duty of loyalty, the agent can advance
interests adverse to yours. For example, once you agree to dual agency, you may need to be careful about what you
https://www.dos.ny.gov/cnsl/dualagcy.html 1/2
FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018
7/3/2018 Officeof GeneralCounsel
NYSCEF DOC. NO. 58 RECEIVED NYSCEF: 07/14/2018
say to your agent because, although your agent stillcannot breach any confidences, your agent may not use the
information you give him or her in a way that advances your interests.
As a principal in a real estate transaction, you should always know that you have the right to be represented by an
agent who is loyal only to you throughout the entire transaction. Your agent's fiduciary duties to you need never be
compromised.
https://www.dos.ny.gov/cnsl/dualagcy.html 2/2
Document Filed Date
July 14, 2018
Case Filing Date
July 14, 2018
Category
Commercial Division
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