Forced Dual Agency in California Real Estate: Why It’s Illegal and What the Consequences Are

California law permits real estate agents to act as dual agents—representing both buyer and seller—but only under narrow conditions. When dual agency is imposed, concealed, or coerced, it crosses a bright legal line. Forced dual agency is illegal under California law and carries serious consequences for agents and brokers who engage in it.

This distinction is not technical. It reflects California’s longstanding policy that consumers must knowingly and voluntarily consent before being placed into a conflicted agency relationship.

The Heightened Fiduciary Duty of Dual Agents

California courts impose the highest fiduciary duties on real estate agents. Agents owe their principals duties of undivided loyalty, full disclosure, and good faith. When an agent acts as a dual agent, those duties are heightened, not relaxed.

A dual agent must disclose all material facts that could reasonably affect a party’s decision to consent to dual representation. Disclosure must be complete, accurate, and timely. Simply disclosing that dual agency exists is not enough; the agent must explain its implications so that any consent is informed and voluntary.

Why Forced Dual Agency Is Illegal

California law prohibits an agent from representing more than one party in a real estate transaction without the knowledge and consent of all parties. Consent cannot be meaningful where material facts are concealed, misrepresented, or predetermined.

Forced dual agency commonly arises when buyers are told—explicitly or implicitly—that accepting dual representation is a condition of purchasing a property, or where agency arrangements are fixed in advance by sellers or brokers in a way that eliminates genuine choice. In those circumstances, any purported consent is illusory.

Why Disclosure Forms Do Not Cure Coercion

Disclosure forms do not legitimize dual agency where consent is not truly voluntary. Courts have rejected the notion that the mere inclusion of statutory disclosure language satisfies an agent’s fiduciary obligations.

An agent must affirmatively disclose the nature of the dual agency, the conflicts it creates, and the alternatives available. Where dual agency is effectively imposed or concealed, paperwork cannot retroactively convert coercion into informed consent.

Legal Consequences of Forced Dual Agency

The consequences of forced dual agency are severe. Agents who breach their fiduciary duties through undisclosed or coerced dual representation face potential license discipline, including suspension or revocation. Courts routinely order forfeiture and disgorgement of commissions obtained through such conduct, even in the absence of intent to deceive or proof of actual damages. Because these violations constitute constructive fraud, courts may also impose equitable remedies such as constructive trusts, treating the agent as holding the commission for the benefit of the injured party.

Key Takeaway

Dual agency in California is lawful only when it is fully disclosed, voluntary, and knowingly accepted. Forced or coerced dual agency—whether through misrepresentation, concealment, or predetermined arrangements—is illegal. The law responds by stripping agents of compensation and imposing remedies designed to deter conflicted representation and protect consumers.

A Final Note

If you—or someone you know—believes they were pressured into dual agency, denied a meaningful choice of representation, or only later discovered that an agent was representing both sides, it is worth having the situation reviewed. These issues are highly fact-specific, and early legal guidance can help determine whether the agency relationship was lawful and what remedies may be available.