In the case of designated agency, what is a critical condition regarding the individual agent's role?

In the context of designated agency, a critical condition is that the agent cannot represent both parties. This structure allows for one agent to represent the interests of one party while another agent in the same brokerage represents the interests of the other party. This setup is significant because it helps to avoid conflicts of interest that could arise if a single agent attempted to represent both sides in a transaction. By ensuring that each party has their own representative, designated agency promotes fair and impartial advice tailored to each party's needs, leading to more equitable negotiations. This principle is at the core of maintaining ethical standards in real estate transactions.