California lets one brokerage represent both sides of a commercial sale or lease, but only with everyone’s informed consent. Here is how dual agency works, what the law requires and when it makes sense.
Dual agency in California commercial real estate is legal, but only with the knowledge and consent of both parties. Written agency disclosures have been required for commercial sales and for leases longer than one year since Jan. 1, 2015. A dual agent owes fiduciary duties to both sides and cannot share either party’s confidential information, such as price flexibility or motivation, without express permission.
This article is general information about statutes and case law, not legal advice.
Key takeaways
- Dual agency happens when one brokerage represents both sides, whether through one agent or two agents at the same firm.
- California’s agency disclosure rules have applied to commercial sales and to leases longer than one year since Jan. 1, 2015.
- A dual agent cannot reveal confidential information, such as a tenant’s maximum rent or an owner’s lowest acceptable price, without that party’s express permission.
- After Horiike v. Coldwell Banker, each agent at a dual-agent brokerage owes both parties the same duties as the broker.
- You can decline dual agency, and you should read any advance consent clause in a listing agreement before you sign.
What is dual agency in California commercial real estate?
Dual agency means one brokerage acts for both sides of the same deal. California Civil Code section 2079.13 defines a dual agent as an agent acting, directly or through a salesperson or broker associate, for both the seller and the buyer. For agency purposes a landlord counts as a seller, a tenant counts as a buyer, and a lease longer than one year counts as a sale.
Agency runs through the broker, so dual agency is not limited to one person working both sides. If two agents at the same brokerage represent the owner and the tenant, the firm is a dual agent.
| Scenario | Dual agency? |
|---|---|
| One agent represents both the landlord and the tenant | Yes |
| Two agents at the same brokerage, one for each side | Yes |
| Each side has a broker from a different firm | No |
| Listing broker deals with an unrepresented tenant without agreeing to represent them | No, if roles are clear, though the broker still owes the tenant honest dealing and disclosure of known material facts |
Is dual agency legal in California?
Yes. The statutory disclosure form says an agent may legally represent both seller and buyer, but only with the knowledge and consent of both. Acting for more than one party without that knowledge or consent is grounds for discipline by the California Department of Real Estate under Business and Professions Code section 10176.
Lawmakers have tried to change this. AB 1059, introduced in 2017, would have banned dual agency in commercial transactions. It never left committee and died Feb. 1, 2018. Dual agency with consent remains lawful.
When do California’s disclosure rules apply to commercial deals?
The agency disclosure rules apply to commercial sales and to leases longer than one year. SB 1171 extended the state’s disclosure requirements to commercial real property starting Jan. 1, 2015, as law firm Allen Matkins explained at the time. Before that, the formal scheme covered only residential deals.
A lease of one year or less falls outside the statutory form. The consent requirement in section 10176 still applies, so a broker cannot act for both sides of a short lease without everyone’s knowledge and consent. Most California commercial brokers use the AIR CRE agency disclosure form, which spells out that “seller” includes a lessor and “buyer” includes a lessee.
What are the agency disclosure steps?
Civil Code section 2079.14 sets the timing, and section 2079.17 covers confirmation of the relationship. Section 2079.14 was amended by AB 2992 effective Jan. 1, 2025; the table reflects the 2025 code text.
| Step | Who | When |
|---|---|---|
| Give the agency disclosure form to the owner | Seller’s or landlord’s agent | Before the listing agreement is signed |
| Give the agency disclosure form to the buyer or tenant | Buyer’s or tenant’s agent | As soon as practicable before a representation agreement and the offer; if the agent did not prepare the offer, by the next business day after receiving it |
| Obtain a signed acknowledgment of receipt | The agent providing the form | When the form is delivered |
| Confirm whether the agent is a buyer’s agent or a dual agent | Buyer’s or tenant’s agent, to both parties | As soon as practicable, confirmed in the contract or a separate signed writing |
What can a dual agent not tell either side?
A dual agent cannot disclose either party’s confidential information without that party’s express permission. Civil Code section 2079.21 covers facts about a client’s financial position, motivations, bargaining position or other personal information that may affect price, such as a seller’s willingness to take less than asking or a buyer’s willingness to pay more.
In an industrial lease, that could include the date a tenant must leave its current building in Shafter, a landlord’s pressure from its lender to fill a vacancy, the tenant’s maximum rent, or how much tenant improvement money the owner is prepared to spend.
What did Horiike v. Coldwell Banker change?
In November 2016 the California Supreme Court ruled unanimously in Horiike v. Coldwell Banker Residential Brokerage Co. that when a brokerage acts as a dual agent, each salesperson working for that broker owes both buyer and seller the same fiduciary duties as the broker. A listing agent at a dual-agent firm cannot claim to owe duties only to the seller. A summary from Wynlaw explains the holding in plain terms.
The case arose from a residential sale. Because the statute the court relied on now covers commercial property too, it is prudent for commercial owners, tenants and brokers to assume the same standard applies.
What are the pros and cons of dual agency for owners and tenants?
Dual agency trades speed and simplicity for independent advocacy. It can help experienced parties close quickly, but neither side gets a broker pushing hard for its position.
| Factor | Potential advantage | Potential drawback |
|---|---|---|
| Speed | One firm coordinates, so questions and documents move quickly | No independent broker pushing back on either side |
| Knowledge | The broker knows the building and the owner’s requirements well | Confidential information is walled off, so the broker cannot use it to help either side |
| Advocacy | A neutral facilitator can help experienced parties close | Neither side gets full, one-sided advocacy on price and terms |
| Cost | The total fee can be negotiated when one firm earns both sides | Without a negotiation, the full fee may simply go to one firm |
When does dual agency make sense in an industrial deal?
It can work when both parties are experienced, the terms are straightforward and the deal is nearly agreed before the broker gets involved. An owner and a tenant who already know each other and need help papering a lease on a small shop building are a common example.
It is a weaker fit for first-time tenants, build-to-suit projects, large improvement packages, or any deal where price and terms are genuinely contested. A distribution user taking a large building along I-5, for example, usually benefits from its own tenant rep broker.
How can you protect yourself if a broker asks you to consent?
Get everything in writing, ask how information will be kept separate, and remember that you can say no.
- Ask whether one person or two agents will handle the deal, and how confidential information will be kept separate.
- Get the disclosure and consent in writing before you share your budget, deadline or bottom line.
- Ask how the total fee is set. Article 7 of the NAR Code of Ethics requires REALTORS to disclose, and get informed consent for, compensation from more than one party. See also how commercial commissions work.
- Read any advance consent clause. AIR CRE’s owner listing form, in its November 2017 version, includes the owner’s consent to dual agency if the broker finds the tenant or buyer.
- Remember that you can hire separate representation. Kern CRE’s guide on how to choose a commercial real estate broker is a good starting point, and so is the description of what a landlord broker does.
What can one-sided advocacy be worth on a 30,000 SF Bakersfield lease?
Small rent differences add up fast, and price negotiation is where dual agency limits matter most. Consider a hypothetical five-year lease on a 30,000-square-foot Bakersfield warehouse. Every 1 cent per square foot per month in rent equals $300 a month, or $18,000 over 60 months. The example ignores escalations and makes no claim about current Bakersfield rents.
A dual agent cannot tell the landlord the tenant would pay more, and cannot tell the tenant the landlord would take less. That protects both parties, but neither has a broker using market knowledge to push the number its way.
| Rent difference per SF per month | Monthly | Over 5 years |
|---|---|---|
| $0.01 | $300 | $18,000 |
| $0.03 | $900 | $54,000 |
| $0.05 | $1,500 | $90,000 |
Hypothetical value of rent differences, 30,000 SF over 60 months.
Frequently asked questions
Is dual agency legal in California commercial real estate?
Yes. One brokerage may represent both sides of a commercial sale or lease if both parties know and consent. For sales and for leases longer than one year, the agents must also deliver written agency disclosures and confirm the relationship in writing. A 2017 bill to ban the practice, AB 1059, died in 2018.
Is it dual agency if two agents from the same brokerage represent each side?
Yes. California treats a brokerage as a dual agent when it acts for both parties, directly or through its salespeople. After Horiike, each agent in that situation owes both parties the same duties as the broker. Two business cards from one firm do not create two separate relationships.
Do the agency disclosure rules apply to commercial leases?
They apply to leases longer than one year. Since Jan. 1, 2015, the state’s agency disclosure statutes have covered commercial property, treating a landlord as a seller and a tenant as a buyer. Shorter leases fall outside the statutory form, but a broker still needs everyone’s knowledge and consent before acting for more than one party.
What information can a dual agent not share with the other side?
Without your express permission, a dual agent cannot pass along confidential facts about your finances, motives or bargaining position. That covers the most rent or price you would pay, the least you would accept, and why you need to move or sell quickly. Duties such as disclosing known material facts still apply.
Can I refuse to consent to dual agency?
Yes. Dual agency requires your consent, so you can decline and hire your own broker. Some listing forms, including AIR CRE’s owner listing form, include advance consent to dual agency. That clause is negotiable before signing, not after a buyer or tenant appears.
What happens if a broker acts as a dual agent without disclosure?
Acting for more than one party without everyone’s knowledge or consent is grounds for Department of Real Estate discipline under Business and Professions Code section 10176. It can also expose the broker to civil claims from the client. If you think this happened in your deal, talk to a real estate attorney promptly.
Should the commission be lower when one firm represents both sides?
California law does not require a reduction, but commissions are negotiable and it is a fair question. Ask for the total fee, how it is split inside the firm and whether it changes if the listing broker also brings the tenant or buyer. Get the answer in writing in the listing or representation agreement.
If you are deciding whether to consent to dual agency on a Kern County sale or lease, or want a second opinion on an agency disclosure, we are happy to explain the options in plain terms. Call Kern CRE at 855-KERN-CRE (855-537-6273) or contact us. Get Kern County CRE news monthly: subscribe to the Kern CRE report.
Sources
- Civil Code Section 2079.13 (definitions: dual agent, buyer includes lessee, seller includes lessor, leaseholds over one year), Justia, 2025 code.
- Civil Code Section 2079.14 (timing of disclosure form; amended by AB 2992, effective Jan. 1, 2025), Justia, 2025 code.
- Civil Code Section 2079.16 (statutory disclosure form; dual agency only with knowledge and consent), Justia, 2025 code.
- Civil Code Section 2079.17 (confirmation of agency relationship), Justia, 2025 code.
- Civil Code Section 2079.21 (dual agent confidential information), Justia, 2025 code.
- Business and Professions Code Section 10176 (acting for more than one party without knowledge or consent), Public.Law, 2025 code.
- Newly Amended Dual Agency Disclosure Law: Much Ado About Nothing (Michael J. Holmes), Allen Matkins, January 2015.
- SB 1171: California Broker Agency Disclosure Law, Hughes Marino.
- AB 1059 (2017-2018 session): Dual agency: commercial real estate transactions, California Legislative Information, final action February 2018.
- Dual Agency: Will It Survive In California? (Corie A. Edwards), Reuben, Junius & Rose, LLP, April 2017.
- Horiike v. Coldwell Banker Residential Brokerage Co., S218734, California Supreme Court, via Justia, Nov. 21, 2016.
- Dual Agent Beware! California Supreme Court Rules that Seller’s Agent Owes a Fiduciary Duty to the Buyer, Wynlaw, November 2016.
- Disclosure Regarding Real Estate Agency Relationship (Form AD-2.01), AIR CRE, revised July 28, 2017.
- Exclusive Right to Represent Owner for Sale or Lease of Real Property (Form OA-8.10), AIR CRE, revised Nov. 1, 2017.
- 2026 Code of Ethics and Standards of Practice (Article 7), National Association of REALTORS, January 2026.
About this article
Kern CRE prepared this article with help from AI research and writing tools. An editor reviewed the draft, checked its facts against the sources linked above and edited it for accuracy and clarity. It is general information, not legal, tax, investment or financial advice; talk with a qualified professional about your situation.