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