Real Estate Agents and Brokers Liability

Real estate agents and brokers have extensive duties under California law. Specifically, they have a fiduciary duty of utmost care, integrity, honesty and loyalty. They must use reasonable care and skill and, furthermore, must disclose all facts known which materially effects the value and desirability of the property.

A competent agent/broker will act with due diligence by providing all relevant information to the buyer. Properly documenting the agent/broker file is essential to avoid unmeritorious claims.

Agents can legally be the agent of both buyer and seller (dual agency) with the consent of the parties. In doing so, the agent has a fiduciary duty to both parties. Buyer and seller must take precautions to protect their own interests by reading documents carefully and consulting other professionals, if necessary.

California civil code section 1102 et. seq. requires full written disclosure, by the seller, of the condition of the property. Failure to disclose significant defects/malfunctions will lead to potential liability of the seller as well as agent/broker, who has an independent duty to investigate all material facts negatively effecting the value and to disclose that which is discovered upon reasonable visual inspection.

The seller must advise prospective buyers of pending lawsuits affecting the property, notices from governmental agencies, unpermitted alterations, building code violations, soil problems, encroachments, hazardous waste and so forth.