Illinois Leasing Agent Practice Exam

What constitutes a dual agency in real estate transactions?

1. Representing both buyer and seller

2. Representing both landlord and tenant

3. Managing multiple properties for different owners

4. Negotiating leases for different tenants

The correct answer is: Representing both landlord and tenant

Dual agency in real estate transactions occurs when a single agent or brokerage represents both parties in a transaction. This means that the same agent represents both the landlord and the tenant in a leasing situation. In this context, dual agency can pose potential conflicts of interest because the agent has a responsibility to both parties, which can complicate negotiations and impartial advice. When representing both landlord and tenant, the agent must navigate the interests of both parties carefully to maintain fairness. This is particularly relevant in real estate, where the goals of the landlord (e.g., obtaining the best rental price) may differ from those of the tenant (e.g., securing a favorable lease agreement). As such, dual agency requires transparency and a clear understanding of the implications for both sides. While representing both a buyer and a seller or managing multiple properties for different owners may involve elements of dual agency, the specific nature of a dual agency relationship is most appropriately described in the context of landlord-tenant relationships.