Michigan License Law Practice Test

Which agency type is NOT recognized in Michigan?

1. Single agency

2. Dual agency

3. Undisclosed dual agency

4. Designated agency

The correct answer is: Undisclosed dual agency

In Michigan, the concept of undisclosed dual agency is not recognized under the law. Dual agency occurs when an agent represents both the buyer and the seller in the same transaction. However, for an agent to engage in dual agency legally, both parties must be fully informed of the relationship and consent to it. Undisclosed dual agency involves an agent representing both parties without their knowledge, which creates a significant conflict of interest and undermines the trust and transparency that are essential in real estate transactions. Michigan law mandates that agents disclose to their clients their representation status, thereby upholding ethical standards and protecting the interests of all parties involved. The other agency types—single agency, dual agency, and designated agency—are recognized within Michigan's framework. Single agency involves representing only one party in a transaction, dual agency is when the agent represents both, and designated agency allows different agents within the same firm to represent the buyer and seller separately, maintaining clearer boundaries and disclosure. Understanding these distinctions is crucial for real estate professionals operating within the state.