Intermediary Relationship in Texas Real Estate

Texas outlawed standard common-law “Dual Agency” and replaced it entirely with the statutory Intermediary Relationship framework. Under TRELA, an intermediary relationship is the only legal mechanism for a single brokerage firm to represent both a buyer and a seller in the same transaction.

Why This Rule Exists

Dual agency created an inherent conflict of interest: an agent could not perform full fiduciary duties (such as loyalty and disclosure) to two opposing parties at once. The Intermediary framework solves this by establishing strict boundaries of neutrality, or by utilizing “Appointments” to ensure both parties receive active representation.

The Exam Trap

A major exam trap is the difference between Intermediary with and without appointments. If the broker sponsors only one sales agent (or acts as an individual broker), they cannot make appointments because an agent cannot be appointed to represent both sides. The single agent must act as intermediary without appointments, meaning they cannot advise or give opinions to either client.

Worked Texas Example

Scenario: Broker Jane of Houston Properties represents both the seller (Sam) and the buyer (Bill) under written representation agreements. She appoints Agent Alex to represent Sam, and Agent Brad to represent Bill. Outcome: This is “Intermediary with Appointments.” Agent Alex can legally advise Sam to hold firm on his price, and Agent Brad can advise Bill to request repairs. Broker Jane remains a neutral supervisor of the transaction.