District of Columbia (DC) Real Estate Commission Practice Test 2025 - Free Real Estate Exam Practice Questions and Study Guide

In a dual agency situation where a licensee represents both the buyer and the seller in a transaction, the fiduciary duty of undivided loyalty is the one that is being forfeited. This duty requires the agent to act solely in the best interest of their client, which means they should prioritize the client's interests above all else, including their own.

When a licensee takes on both parties, there is an inherent conflict of interest. They cannot fully advocate for one party without potentially compromising the interests of the other. This situation makes it impossible to provide undivided loyalty to both clients simultaneously. The agent must balance the competing interests and risks creating a scenario where neither party receives the full attention and advocacy they deserve.

The other fiduciary duties, such as accounting, disclosure, and reasonable care, can still be maintained in a dual agency; however, the commitment to put one client's interests first is lost. Hence, undivided loyalty is the critical fiduciary duty that becomes compromised in such arrangements.