Agency, IABS, and the Texas Intermediary
Texas uses distinctive agency terminology: instead of 'dual agency' it uses the 'intermediary' relationship, and it requires the Information About Brokerage Services (IABS) notice. This chapter explains representation and the required disclosures.
Information About Brokerage Services (IABS)
Texas licensees must provide the Information About Brokerage Services (IABS) notice to a prospective client at the first substantive communication about a specific property. The IABS explains the ways a broker can represent a party, the broker's minimum duties, and how the broker is paid. It is an informational notice and does not by itself create a representation agreement; separate written agreements establish representation.
The Intermediary Relationship
Texas does not use the term 'dual agency.' Instead, when a broker represents both the buyer and the seller in the same transaction, the broker acts as an intermediary. The intermediary role requires written consent from both parties in the representation agreements, and the broker may appoint different associated license holders to communicate with and advise each party. The intermediary and any appointed license holders must not disclose confidential information, such as the price a party will accept, to the other side.
Duties and Confidentiality
A Texas broker and sponsored agents owe statutory minimum duties to their clients, including honesty, disclosure of known material defects, and protection of confidential information. When acting as an intermediary, the broker must remain impartial and follow the appointment and confidentiality rules. Understanding how the intermediary structure differs from other states' dual agency is frequently tested on the Texas broker exam.