North Dakota Real Estate Practice Exam

True or False: A subagency arrangement is considered a written agency agreement for the purposes of dual agency.

1. True

2. False

3. Only in specific circumstances

4. Misleading without proper context

The correct answer is: False

A subagency arrangement is not considered a written agency agreement for the purposes of dual agency, which is why the answer is false. In the context of dual agency, which occurs when one agent represents both the buyer and the seller in the same transaction, there must be explicit consent from all parties involved. Written agency agreements clearly outline the roles, responsibilities, and permissions for agents and clients. A subagency, however, arises when a listing agent (the principal agent) permits another agent (the subagent) to assist in the transaction. While the subagent has a fiduciary duty to the listing agent's client, this does not constitute a separate agency relationship that would satisfy dual agency requirements. Thus, for dual agency to be valid, it needs to be established under a formal written agreement explicitly stating the agents' roles and obtaining acknowledgment from all parties. Since a subagency is often more about collaboration than a defined agency relationship, viewing it as a written agreement could lead to misunderstandings about the actual agency dynamics involved.