Final answer:
Dual agency is illegal in Colorado. It refers to when an agent represents both the buyer and seller in a real estate transaction, which Colorado law prohibits to avoid conflicts of interest.
Step-by-step explanation:
In real estate, dual agency refers to a situation where a single agent represents both the buyer and the seller in the same transaction. In many areas, this practice is considered controversial because it can create a conflict of interest for the real estate agent, as it can be challenging to fairly represent the interests of both parties simultaneously. Recognizing these potential complications, Colorado has laws in place to protect consumers by making dual agency illegal. Instead, Colorado real estate agents are required to represent only one party in a transaction or act as a transaction broker, where they assist both parties but do not owe either the full fiduciary duties that come with a traditional agency relationship.
Protecting the interest of all parties involved in a real estate transaction helps to ensure a more transparent and fair process. It's important for those engaging in real estate in Colorado to understand this aspect of the law to avoid legal complications or conflicts of interest.