CA Court of Appeal Held Listing Agent on a Home Sale Owed Fiduciary Duties to the Buyer

California real estate lawA California Court of Appeal held in Horiike v. Coldwell Banker, et. al., the California Court of Appeal (2nd appellate district, division 5) that the Agent on a Home Sale Owed Fiduciary Duties to the Buyer.

Question is whether a listing agent who is associated with the same brokerage as the buyer’s agent (dual agency in California) on a purchase and sale transaction has the same fiduciary duties to the buyer as he/she does to the seller.

CA laws and Real EstateThis established new court-made law that where a listing agent and a buyer’s agent are both licensed with the same broker (in this case dual agents with Coldwell Banker Residential Brokerage), they each owe the same fiduciary duties to both parties to the real estate purchase and sale transaction.

The owners of a luxury residence in Malibu in 2006 hired a listing agent to sell their home, and he was licensed under Coldwell Banker Residential Brokerage Company. This agent listed the property on the MLS as “approximately 15,000 square feet of living areas” and prepared a flyer accordingly. A buyer (Mr. Horiike) with his own buyer’s agent (from a different Coldwell Banker office) presented an offer and asked the listing agent for verification of size square footage. The listing agent provided a letter from the architect stating that the living area was approximately 15,000 square feet.

Mr. Horiike (the buyer) did not have the property measured for size and bought the property. It was later determined that the square footage size of the home was significantly less than 15,000 square feet. He filed a lawsuit against the listing agent and Coldwell Banker (but not against his own buyer’s agent) and alleged misrepresentation and breach of fiduciary duty. The trial court granted the motion by defendants for non-suit and held that the listing agent did not represent the buyer and owed no fiduciary duty to the buyer.

The Court of Appeal reversed and said that “a broker’s fiduciary duty to his client requires the highest good faith and undivided service and loyalty” and that the dual agency relationship had been created where the listing agent and buyer’s agent were licensed under the same broker (Coldwell Banker Residential Brokerage) representing the buyer and seller, and that each salesperson owed fiduciary duties not only his or her own client, but also owes those same duties to the other agent’s client.  This court of appeal decision has been appealed to the CA Supreme Court (case #S218734) and is now pending.

By Harrison K. Long – attorney, CAL State Bar Association member #69137 – 949-701-2515 cell/text.  California real estate broker – CAL BRE #01410855.

“CA Court of Appeal Held that Listing Agent on a Home Sale Owed Fiduciary Duties to the Buyer”

About Harrison K. Long

Real estate and business attorney. CA State Bar Association attorney member #69137. Professional real estate representative, REALTOR®, GRI, Real estate broker, CALBRE #01410855. Broker associate, HomeSmart Evergreen Realty, Irvine, CA. Providing real estate legal information and services for property owners, estate trustees, executors and administrators, fiduciaries, bankers, investor group managers, with their best decisions about homes and real estate. Orange County REALTORs® (member and prior service on its board of directors). "Realtor of the Year 2016" award by the Orange County REALTORs®. California Association of REALTORs® (now serving on its board of directors). National Association of REALTORs® member. Contact by cell or or text at 949-701-2515.
This entry was posted in California laws, California real estate, California real estate laws, Dual agency and tagged , , , , , , , , , , . Bookmark the permalink.

Leave a Reply