Alaska might be the next state to put the controversial concept of dual agency on the chopping block. Lawmakers are close to passing a bill that would replace dual agency with the highly debated concepts of designated agency and neutral licensees.

The bill’s sponsors say it clarifies relationships between consumers and real estate licensees. But critics charge it does nothing more than trim agent and broker liability.

Alaska might be the next state to put the controversial concept of dual agency on the chopping block. Lawmakers are close to passing a bill that would replace dual agency with the highly debated concepts of designated agency and neutral licensees.

The bill’s sponsors say it clarifies relationships between consumers and real estate licensees. But critics charge it does nothing more than trim agent and broker liability.

Take an Inman Pulse survey on dual agency.

The bill, HB29, would prevent agents from practicing dual agency, which occurs when one real estate broker represents both the buyer and seller in a real estate transaction. Instead, state law would allow one agent to act as a “neutral licensee” who could perform specific services for both the buyer and seller, but not represent either of them.

The bill recently passed a state House vote and now awaits action in the Senate. If it becomes law, it is expected to become effective Jan. 1, 2005.

Linda Garrison, broker/owner of AAR #1 Buyers Agency in Anchorage, believes the legislation has more to do with agent and broker protection than it has to do with consumers. She argued that the bill’s contents create a riskier situation for consumers than dual agency does.

“HB29 has nothing to do with clarifying agency, nothing to do with protecting the consumer, no benefits at all to the public. It removes protections already in place with the common law of agency,” Garrison wrote in an e-mail message.

Buyers and sellers who utilized a neutral licensee would be getting only services, not representation. Critics of the legislation question whether those buyers and sellers would grasp the legal implications of no representation. If the deal went awry, they might not be able to sue the broker or agent, for example.

The bill introduces the term “designated licensee,” a concept that would allow two agents from the same brokerage company to handle opposite sides of the same deal. A designated licensee works for a real estate broker and represents or provides specific assistance to a person in a real estate transaction when another licensee working for the same broker represents or provides specific assistance to an unrepresented person in the same transaction.

Garrison believes the arguments for designated agency sound like the same arguments that were used 10 years ago for dual agency, except that dual agency had a legal basis in common law, whereas “designated” agency is a made-up term.

“That’s bad enough, but couple it with abrogation of the gut of common law and the consumer is in deep trouble–and they won’t even know it,” she stated.

“I don’t really care what they call it, but when one agent in a company represents the buyer and another agent represents the seller–just elimination of the term

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×