I am always interested to read about new legal cases on the subject of Dual Agency. Many agents consider a Dual Agency shaky ground from both a legal and moral perspective. In fact, I have met quite a few ‘out of state agents’ who now practice Real Estate in California and who still refuse to represent both the Buyer and Seller.
But what if the buyer and seller are represented by different salespersons within the same brokerage firm?
It is well established that a dual agent owes a fiduciary duty to both the buyer and the seller. This case ruled that when a buyer and seller are working with different salespersons in the same brokerage – even different offices – that both the broker and the salespersons are dual agents. Therefore, the case held that whether the broker is a natural person or a corporation, the salespersons on either side of the transaction owe a fiduciary duty to both the buyer and the seller.
California Appellate case: Horiike v. Coldwell Banker Residential Brokerage, filed April 9, 2014, Second District, Div. Five, 225 Cal.App.4th 427; 169 Cal.Rptr.3d 891
As in many real estate disputes, the facts in this case relate to square footage. The house, while listed with the broker, had fallen out of escrow from a prior purchase contract with a buyer also represented by this broker. In that prior escrow the person acting as the listing agent had passed along to the buyer information that the actual square footage was in some dispute, and in a hand written note advised the buyer that they should confirm the actual square footage for themselves.
While still listed with this same broker a new buyer, also represented by the listing office, entered into a new contract to purchase the property. However, while the person acting as the listing agent gave them the information on the different accounts of square footage, that person did not include the handwritten note to the second buyer to confirm the square footage for themselves.
The buyer sued the listing salesperson and broker but did not name their own buyer’s agent from the same firm in the suit. The trial court judge ruled that the broker and the listing salesperson did not owe a fiduciary duty to the buyer. The jury exonerated the listing agent and broker on all misrepresentation claims.
This is where it gets interesting:
The appellate court then reversed and found that the broker, and therefore the listing agent, owed duties to the buyer. Coldwell Banker has filed for a hearing before the California Supreme Court and C.A.R. is filing a letter in support of the Court accepting the case for review.
Thank you CAR’s Realegal for sharing this great article in your Newsletter! I am very interested to see how this will play out!
About Jaleesa Peluso
Jaleesa Peluso is a Laguna Beach Realtor®. As a Laguna Beach Realtor she specializes in coastal homes and luxury home marketing. For more information about Orange County Real Estate or Laguna Beach Real Estate, visit: www.jaleesapeluso.com
Contact: (949) 395-0960 or Jaleesa@JaleesaPeluso.com