REAL ESTATE AGENCY
IN CONNECTICUT
A Three Hour
Continuing Education Module
September 2002
Credits
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The Connecticut Real Estate Commission has made Agency a mandatory
course for the continuing education cycle ending in 2004.
This module was developed by Katherine A. Pancak, Associate Professor
in Residence of Finance and Real Estate at the University of Connecticut,
with funding from the Center for Real Estate and Urban Economic
Studies, University of Connecticut.
Special thanks are extended to the following individuals for the valuable
contributions, insights and assistance:
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Adorna Carroll, Owner and Instructor, Dynamic Directions, Inc.
Laurence L. Hannafin, Hannafin Consulting
Donna Hohider, Vice-Chairperson, Connecticut Real Estate Commission
Ted Mansfield, Administrator, New Haven Real Estate School
Eugene A. Marconi, General Counsel, Connecticut Association of Realtors, Inc.
Laureen Rubino, Real Estate Examiner, CT Department of Consumer Protection
Teresa Sirico, Teresa Sirico Realtor LLC
Fred Southwell ABRM, CRB, GRI, Southwell Education
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Course Reference Materials
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Connecticut Real Estate Commission Policy on Agency,
Adopted 1.6.00
C.G.S. Section 20-325d – Disclosure of Representation
C.G.S. Section 20-325f – Broker Subagency, Written
Consent Required
C.G.S. Section 20-325g – Dual Agency Consent
Agreement
Connecticut Regulations Concerning Designated Agency
Connecticut Regulations Section 20-328-9a – Interfering
With Agency Relationships
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Course Overview

Agency Pretest
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General Agency Theory
Critical Agency Issues
Agency in Practice
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Agency Pretest Revisited
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Agency Pretest
True or False
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An Agency Disclosure Notice is given to an unrepresented buyer or
seller.
An agent can not work with a prospective buyer unless the buyer signs
a buyer agency agreement.
In order to represent a buyer, a buyer agency agreement must be
signed before a property is shown to the buyer.
Sub-agency is illegal in Connecticut.
A dual agent is required to act in the best interests of both the seller
and the buyer.
Dual agency consent can be obtained at the time an agency agreement
is signed.
A designated agent only represents one party and is not a dual agent.
A brokerage firm representing two buyers interested in the same
property is not a dual agent.
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GENERAL AGENCY THEORY
Agency
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Agent - Person who represents the interests of
another person (called the principal) when dealing
with third parties.
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CT real estate agency: the office broker is the agent.
Additionally, all salespersons/brokers who work for that office
broker are also agents of the principal.
Dual Agent - An agent that represents both the
buyer and the seller in the same transaction.
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CT real estate agency: if the office broker is a dual agent, all
salespersons/brokers who work for that office broker are also
dual agents.
C.G.S. Section 20-325g – Dual Agency Consent Agreement
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Agency, continued
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Designated Agent – A dual agent that has been
designated to only represent one party.
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CT real estate agency: a dual agent office broker may
designate one salesperson/broker to represent the buyer
and one to represent the seller (given the informed consent
of buyer and seller)
Connecticut Regulations Concerning Designated Agency
Subagent – A person authorized to assist an agent
to act on the principal’s behalf.
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CT real estate agency: a cooperating broker can only act as
a subagent of a seller if the seller consents to the
subagency.
C.G.S. Section 20-325f – Broker Subagency
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Agency in Real Estate
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No written
agreement,
no agency
Broker and Salespeople
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Client
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Customer
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Agency created by
written
agreement
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Agency Scope
Property type
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Transaction
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Residential
Commercial
Purchase and Sale
Leasing
Note – the course examples will be limited to
residential purchase and sale transactions, however
all agency concepts also apply to commercial
transactions and leasing transactions.
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Duties of Agent to Client
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FIDUCIARY
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Loyalty
Obedience
Reasonable Skill and Care
Accounting
Disclosure
Confidentiality
The agent must act for the benefit of the
principal/client in all matters connected with
the agency
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Duties of Agent to Customer
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Non-fiduciary
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Honesty
No misrepresentation
Disclosure of material property facts
Accounting (for escrow monies)
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Client v. Customer
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CLIENT
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Agent must put client’s interests above her/his own.
Agent must follow lawful instruction of client.
Agent must negotiate for best terms and conditions
for client.
Conversations and information between agent and
client must remain confidential.
CUSTOMER
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Agent can assist but not advocate for customer.
Conversations and information between agent and
customer not confidential (may have a duty to
disclose to client).
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CRITICAL AGENCY ISSUES
Determining Relationship
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Consumer enters into written agency
agreement
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Client relationship
Consumer declines to enter into written
agency agreement
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Customer Relationship
Disclose non-agency by providing Real Estate
Agency Disclosure Notice Given to Unrepresented
Parties
Can only show in-house listings as seller’s agent
(need subagency consent to show another firm’s
listings to a customer).
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What happens…?
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Buyer has
approached Agent
about viewing
properties. Buyer is
hesitant about
entering into a
buyer agency
agreement “at this
early stage”.
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…Result
Agent should
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Ask whether Buyer is currently being represented
by another firm.
Explain Agent’s firm’s office policy on various
agency, dual agency, designated agency, and
customer relationships that Agent could potentially
have with Buyer.
Specifically tell Buyer not to provide confidential
information unless and until Buyer and Agent have
entered into an agency relationship.
IT IS NOT THE LAW THAT A BUYER MUST
SIGN A BUYER AGENCY AGREEMENT –
Agent can work with Buyer as a customer.
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…Result, continued
Working with Buyer as Customer
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Agent represents Seller
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Must provide Buyer with Real Estate Agency
Disclosure Notice Given to Unrepresented
Parties (see C.G.S. Section 20-325d – Disclosure
of Representation)
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Can only show in-house listings
Can give Buyer information on Property,
Agent’s firm, mortgage rate and lending
institutions
Agent cannot
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Ask Buyer to disclose confidential information
Show property listed with another firm
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Timing of
Buyer Agency Agreement
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Written agency agreement must be signed
before a licensee negotiates on behalf of
buyer or seller.
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Connecticut Regulations Section 20-328(a)(1) and (2)
“Negotiate” means
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Asking a consumer to disclose confidential
information
Physically showing another firm’s listing
Discussing an offer on another firm’s listing
Connecticut Real Estate Commission Policy on Agency,
Adopted 1.6.00, Section 5
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What happens…?
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Buyer calls Agent
and asks that Agent
meet him at a
property listed with
another firm.
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…Result
Agent should
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Ask whether Buyer is currently being
represented by another firm.
Explain Agent’s firm’s agency policies.
Explain that in order to show another
firm’s listing, a Buyer Agency Agreement
must be entered into.
Arrange for a meeting where Agent can
explain Buyer Agency more fully to Buyer.
Note that Agent could show Buyer an in-house in
the capacity of the seller’s representative, after
having provided Buyer with the Real Estate
Agency Disclosure Notice Given to Unrepresented
Parties.
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Written Agency Agreement
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Types
SELLER
BUYER
Open Listing
Open Right to Represent Buyer
Exclusive Agency Listing
Exclusive Agency Right To
Represent Buyer
Exclusive Right To Sell Listing
Exclusive Right To Represent
Buyer
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Agreement must accurately explain
compensation arrangements.
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What happens…?
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Buyer is interested
in entering into a
buyer agency
agreement, but is
unwilling to accept
any financial
responsibility.
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…Result
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Written buyer agency
agreement must specifically and
accurately explain compensation
arrangement.
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Buyer has no obligation to pay a
fee under any circumstances.
Buyer has obligation to pay a fee
only if Seller or Seller’s agent does
not compensate Agent.
Buyer has obligation to pay a fee.
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Handling the Possibility of
Dual Representation
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Possibility of dual
representation
should be addressed
up front
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In listing agreement
with seller clients
In buyer agency
agreement with
buyer clients
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Actual consent can
not be obtained until
both clients
identified
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Dual Agency
Designated Agency
If one client does
not consent, can not
represent both.
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What happens…?
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Firm policy allows
representation of both buyers
and sellers, so that a dual
agency conflict may arise. At
the time of her buyer agency
consultation with Firm, Agent
notifies Buyer of this possibility.
Buyer asks Agent “what will
happen if I am interested in
making an offer on one of your
in-house listings?”
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…Result
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Agent should explain how Firm handles dual agency.
“If you are interested in making an offer on an in-house listing, our
firm would be a dual agent. The firm would inform you of this
situation before you write up the offer.”
“With your and the seller’s written consent, we could proceed in one
of two ways. First the firm and all of its agents could act as dual
agents representing both you and the seller. As a dual agent, the
firm would have certain prohibitions against disclosure of
confidential information about you to the seller and vice versa.
Second, the firm could assign a designated agent within the firm to
represent you, and another agent to represent the seller. While the
firm would still be considered a dual agent, your designated agent
would owe full loyalty to you.”
“If either you or the seller do not agree to either of these options,
the firm would have to terminate our agency agreement with one of
you.”
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Dual Agency:
Representing Buyer and Seller
Firm MUST
 Obtain written consent for DUAL AGENCY
OR
 Obtain written consent for DESIGNATED
AGENCY
OR
 DECLINE REPRESENTATION of one of the
clients (option should have been provided for
in agency representation agreement)
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Dual Agency:
Acting as a Dual Agent
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Both clients MUST give their written informed consent
Fiduciary to both clients
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still owe all fiduciary duties
Additional confidentiality requirements - can not disclose
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unless client gives express written consent to disclosure
personal or confidential information about one client to the other
motivation of either client
that seller would accept less than listing price
that buyer would pay more than offer price
that either client would agree to financing terms other than those
offered
still must disclose info required by law, such as about material
property defects
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What happens…?
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Buyer has entered into
buyer agency
agreement with Firm
and is now interested in
making an offer on one
of Firm’s in-house
listings. Buyer and
Seller signed Dual
Agency Consent
Agreement at the time
they entered into their
respective agency
agreements.
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…Result
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Before Buyer writes an offer, Firm must
disclose conflict with Buyer.
Before Seller is presented with an offer,
Firm must disclose conflict with Seller.
In order to proceed as dual agent, Firm
must obtain informed consent from both
Buyer and Seller.
Informed consent can be obtained using
state Dual Agency Consent Agreement.
If Firm proceeds as dual agent… review
confidentiality requirements previous
and next slides.
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…Result, continued
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Dual Agency Consent Agreement
defines dual agent’s additional duties.
Dual agent cannot disclose
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Confidential information about one client to
the other.
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Unless required by law (material defects) or
authorized by client whose information is
disclosed.
This includes
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to Buyer that Seller will accept less than the
asking price
to Seller that Buyer will pay more than price
submitted in written offer
motivations for selling/buying
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Dual Agency:
Acting as a Designated Agent
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Firm policy determines whether this option will
be offered to clients.
Only allowed if both parties give their written
consent – obtained using Dual Agency/Designated
Agency Disclosure Notice and Consent Agreement.
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Firm appoints one agent to represent Buyer and
one agent to represent Seller.
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Brokerage firm still considered dual agent
Designated agent not deemed dual agent.
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Owes fiduciary duties
Can use confidential info about other party obtained
after appointment
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What happens…?
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Buyer has entered into
buyer agency
agreement with Firm
and is now interested in
making an offer on one
of Firm’s in-house
listings. Buyer has
agreed in writing to
designated agency.
Seller will not agree to
any type of designated
or dual agency.
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…Result
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Firm can not proceed as a designated
agent if both Buyer and Seller do not
agree in writing.
Firm can not assign a designated
agent for just one of the parties.
Firm must terminate either Seller or
Buyer’s agency agreement (can refer
to another firm), and proceed only
representing one of the parties.
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Representing Competing Clients:
Buyer v. Buyer / Seller v. Seller
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Not dual agency.
Must provide notice in agency
agreement that firm may represent
competitors.
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Listing Agreement – notice that firm may
represent other sellers competing for
buyers
Buyer Agency Agreement – notice that firm
may represent other buyers competing for
same property
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What happens…?
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Firm represents Buyer 1
and Buyer 2, who are
both interested in
making an offer on the
same property. Can
Firm proceed in
representing both of
these competitors?
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…Result
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Buyer 1 and Buyer 2 have competing
interests.
This is not the same as dual agency,
where clients have adverse interests (e.g.
buyer v. seller), so dual agency consent is
not required.
Firm can represent both clients, as long as
they were both notified that Firm has the
right to represent competing interests.
Firm should advise both Buyers to make
their best offer, and inform that that seller
will make ultimate decision.
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Confidential Information
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Cannot reveal confidential information about
a client at any time before or after an
agency relationship.
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Confidential info = facts concerning person’s
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Can’t use info about past clients to that person’s
disadvantage or to the advantage of another
Assets, liabilities, income, expenses
Motivations to purchase, rent or sell
Previous offers received or made that are not a
matter of public record
Not confidential
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Matters of public record or common knowledge
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What happens…?
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Agent’s listing agreement
with Seller has terminated.
When Agent represented
Seller, Seller stated that he
would accept $10,000 less
than property’s listing
price. Seller has now
listed property with
another firm. Agent now
represents Buyer who is
interested in Seller’s
property.
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…Result
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Agent can not disclose to Buyer that
Seller will accept less than the listing
price of the property.
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Interfering with
Agency Relationships
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A licensee can not interfere with the
agency relationship of another licensee.
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Connecticut Regulations Section 20-328-9a
Interfering includes
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Encouraging a person to break an exclusive
agency agreement with another firm.
Advising a person on how to break an exclusive
agency agreement with another firm.
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What happens…?

Buyer approaches
Agent about a
property. Buyer
states that she has
previously signed a
buyer agency
agreement with
another firm, but
now wants to work
with Agent.
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…Result
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Agent can not encourage or
advise Buyer to break buyer
agency agreement with other
firm.
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Penalty – loss of license, fine
Agent can only suggest that
Buyer talk to other firm or to
Buyer’s attorney if she wishes to
terminate an agency
relationship.
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AGENCY IN PRACTICE
Case Studies
Agency in Practice
Case Study 1
Alex, a salesperson with Right Realty, is hosting
an open house at property listed with Right
Realty.
Does Alex need to notify potential buyers that he
and Right Realty represent the seller?
How should Alex proceed with a potential buyer
that wants to discuss the house?
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Case Study 1
Discussion Points
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Agency disclosure at an open house can be made through a sign,
poster, or pamphlet.
Prior to any discussion concerning a buyer’s specific real estate
needs, Alex should ask buyer whether he/she has signed an agency
agreement with a real estate firm.
If yes, the buyer is represented.
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No further agency disclosure is needed.
Alex should refer buyers to their agent for discussion/questions on the
property.
If buyer is not represented
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written disclosure must be made using the Real Estate Agency
Disclosure Notice Given to Unrepresented Parties (indicating that Right
Realty represents seller), OR
Alex can discuss entering into a written buyer agency agreement (in
which case Right Realty represents buyer; also seller as to this house).
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Agency in Practice
Case Study 2
Barb and Bob Breyer set up a meeting with Alex
to discuss a house that they saw in the paper
listed with Right Realty. The Breyers state
that they may also be interested in other
houses in that neighborhood too, and have a
lead on a for-sale-by owner property.
How should Alex proceed at this meeting with
the Breyers?
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Case Study 2
Discussion Points
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Prior to any discussion concerning the Breyers’ specific real estate
needs, Alex should ask buyer whether they have signed an agency
agreement with another real estate firm.
If yes, Alex should refer Breyers to their agent for
discussion/questions on the properties they are interested in.
If the Breyers are not currently represented by another firm, Alex
should discuss representation options.
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Alex can work with the Breyers as CUSTOMERS.
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No agency agreement.
Alex represents sellers of in-house listings; can only show in-house listings.
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Real Estate Agency Disclosure Notice Given to Unrepresented Parties
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Alex can work with the Breyers as CLIENTS.
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Written agency agreement required.
Alex represents Breyers; can show in- and out- of house listings.
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Agency in Practice
Case Study 3

Barb and Bob Breyer entered into a
buyer agency agreement with Right
Realty. After looking at many
properties, they tell Alex that they
would like to make an offer on a house.
The house the Breyers are interested in
is listed with Right Realty.
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Case Study 3
Discussion Points
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Before Alex assists the Breyers in writing an offer, Alex
must disclose the dual agency conflict with them.
Depending on Right Realty policy, Alex can offer the
Breyers either dual agency or designated agency
representation.
In order to proceed as dual/designated agent, Firm must
also obtain informed written consent from both the
Breyers and the seller.
Review confidentiality requirements from previous
slide.
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Agency in Practice
Case Study 4
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
Barb and Bob Breyer entered into a buyer
agency agreement with Right Realty. After
looking at many properties, they tell Alex that
they would like to make an offer on a house.
The house the Breyers are interested in is for
sale by owner.
How would Alex and Right Realty be
compensated in this transaction?
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Case Study 4
Discussion Points
Alex should review the Breyers’ buyer agency agreement
 Does it provide that (1) Right Realty have an obligation
to work w/the Breyers in a FSBO, and (2) that the
Breyers’ will pay a fee in this instance?
 If yes to either or both, Alex should remind the Breyers
that this will be the case.
 If no to either or both, how will Right Realty be
compensated?

Can Alex seek a listing agreement providing for compensation
from the seller?

Should discuss this first with the Breyers as it will cause dual
agency.
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Agency Pretest Revisited
T The Agency Disclosure Notice is given to an unrepresented buyer or
seller.
F An agent can not work with a prospective buyer unless the buyer signs
a buyer agency agreement.
T In order to represent a buyer, a buyer agency agreement must be
signed before a property is shown to the buyer.
F Sub-agency is illegal in Connecticut.
T A dual agent is required to act in the best interests of both the seller
and the buyer.
F Dual agency consent can be obtained at the time a listing agreement or
buyer agency agreement is signed.
T A designated agent only represents one party and is not a dual agent.
T A brokerage firm representing two buyers interested in the same
property is not a dual agent.
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