Emphasis on Dual Agency Yields Lawsuit
Lawsuit says there’s a dark side to agency’s growth. Former client accuses company of sneaky dual-agency tactics that left her and other unsuspecting clients to pay hefty commissions.
(Mountain Lakes, NJ, October 4, 2018) — A recent lawsuit in New York State raises a spotlight on dual agency, a practice that’s beloved by brokers and agents but oft-criticized by consumer advocates.
The lawsuit says that Houlihan Lawrence represented both the
buyer and seller in nine out of 10 of Houlihan
Lawrence’s biggest home sales in Westchester
County, a sales total of more than $47 million. In
Bronxville, 48 of 75 Houlihan Lawrence sales were
dual-agency deals, including 80 percent of all deals
$2 million or more, the suit says.
Like many states, New York allows dual agency — so long as it’s clearly disclosed to clients.
The lead plaintiff, says Houlihan Lawrence never made clear the downsides of dual agents. Her suit says Houlihan Lawrence makes dual agency part of its basic business plan, offering incentives to agents to steer clients to in-house transactions. According to the suit, Houlihan Lawrence offers fewer disclosures than rival brokerages about the downsides of dual agency. The suit also says Houlihan Lawrence uses preprinted versions of the state disclosure forms, with boxes already checked rather than unmarked so that clients can fill them out.
More on the perils of dual agency appears in the October issue of Real Estate Broker’s Insider. Click below to learn more about the Insider, the only news source exclusively for residential real estate brokers, owners, and managers.
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