Definition of "Dual contract"

Dennis Ciesil real estate agent

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Dennis Ciesilelite badge icon

Baird & Warner Real Estate

As you would correctly presume, a dual contract shouldn’t exist at all. A genuine agreement is a legally-binding document. Once the participants sign a contract, the law forces them to act accordingly. As opposed, a dual contract indicates an illegal practice at hand. A first contract can serve as a subterfuge to achieve the second contract’s objectives. Let’s see what dual contracts in real estate and dual contracting define!

Choose expert representation for your real estate transactions!

Suppose you want all your real estate transaction documents one hundred percent legit when you sell an asset or buy a property. The seller’s disclosure, purchase agreement, deed transfer, title review, and property survey (among the most notable ones) must be genuine. In that case, it would be best to get in touch with experienced local real estate agents. They will supervise the entire process and its legal framework. 

Working with them, you won’t be exposed to legal liabilities and the threat of dual contracts in real estate or dual contracting! Moreover, they don’t practice dual agency. Their priority remains to nourish the agent-clientrelationship


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Dual agency implies dual contracting in real estate when an agent simultaneously represents the buyer and the seller without the knowledge and consent of the other party.

What do dual contracts real estate imply?

Dual contracts in real estate define two documents or agreements between two parties who signed two contracts for the same deal or business. Suppose an individual wishes to finance their first home in 2023. Or, they want to make money by investing in starter properties

Dual contracts are frequently used when applying for a loan.

However, economic times are tough, and high-interest rates hammer the real estate market. And don’t forget that interest rates for investment properties are higher than first-residence mortgage loans! Many people can’t afford such a financial burden in the long run. In addition, many homebuyers simply don’t qualify for a loan because the minimum credit score is too high for them.

The second contract can often be used to illegally obtain money from another agent, for instance, a bank or any other lending institution. In this case, the second contract goes against the terms established in the first and actual agreement. Fraudulent people regularly use the contract to determine the more extensive amount to apply for a mortgage. At the same time, the real contract contains a lower sum.  

Having two entirely different contracts for the same transaction is a practice against the law. And needless to say, it’s altogether unethical.

Dual contracts don’t always imply something shady.

A dual contract can also refer to an employee signing two employment contracts with two separate employers, albeit in the same organization.  

Furthermore, we encounter a famous dual contract example, the Dual Subway System. 

How the Dual Contract of the Subway System revolutionized NYC

The Dual Contracts were contracts for the building, renovating, and operating New York City rapid transit lines. The Interborough Rapid Transit Company and the Brooklyn Rapid Transit Company signed the dual contracts on March 19, 1913. The IRT and BRT built and renovated multiple subway lines in New York City as part of the Dual Contracts then would run them for 49 years.

The majority of the current New York City Subway lines were developed or refurbished under these contracts. Why did they call them dual? The arrangements were “dual” in the sense that NYC and two distinct private corporations signed them. The IRT and BRT (later, it was called Brooklyn-Manhattan Transit Corporation) collaborated to make the Dual Contracts a reality.

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