Interesting Legal Case in California
I don't have any opinion about legal cases that happen, but I thought this was very interesting. If you go to an open house and ask the listing agent to represent you and she declines but forwards your business to her colleague with the same company (doesn't matter if its a different franchisee), she AND the buyers agent have a fiduciary duty to you!
New Case Holds Different Salespersons Under the Same Broker Are Dual Agents
A dual agent owes a fiduciary duty to both the buyer and the seller. In the recent case of Horiike v. Coldwell Banker Residential Brokerage, (225 Cal.App.4th 427; 169 Cal.Rptr.3d 891) a California appellate court ruled that when a buyer and seller are working with different salespersons in the same brokerage - even if the respective agents are at different offices (but under the same brokerage) - both the broker and the salespersons are dual agents. So for example, a person acting as a listing agent would owe a fiduciary duty to the seller as well as to the buyer, if the person acting as the buyer's agent were with the same brokerage.
The case related to a dispute over 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 given the buyer information that the actual square footage was in dispute, and in a handwritten note advised the buyer to confirm the actual square footage.
While still listed with the 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 the buyer the information on the different accounts of square footage, in that second transaction, the person did not include the handwritten note that the buyer should take steps to confirm the square footage.
The buyer sued the listing salesperson and broker but did not sue the buyer's agent. The trial court judge ruled that the broker and the listing salesperson did not owe a fiduciary duty to the buyer. The jury ruled in favor of the listing agent and broker on all misrepresentation claims. The buyer appealed.
The appellate court reversed the trial court judge's ruling and found that the broker, and listing agent, both owed fiduciary 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.
New Case Holds Different Salespersons Under the Same Broker Are Dual Agents
A dual agent owes a fiduciary duty to both the buyer and the seller. In the recent case of Horiike v. Coldwell Banker Residential Brokerage, (225 Cal.App.4th 427; 169 Cal.Rptr.3d 891) a California appellate court ruled that when a buyer and seller are working with different salespersons in the same brokerage - even if the respective agents are at different offices (but under the same brokerage) - both the broker and the salespersons are dual agents. So for example, a person acting as a listing agent would owe a fiduciary duty to the seller as well as to the buyer, if the person acting as the buyer's agent were with the same brokerage.
The case related to a dispute over 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 given the buyer information that the actual square footage was in dispute, and in a handwritten note advised the buyer to confirm the actual square footage.
While still listed with the 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 the buyer the information on the different accounts of square footage, in that second transaction, the person did not include the handwritten note that the buyer should take steps to confirm the square footage.
The buyer sued the listing salesperson and broker but did not sue the buyer's agent. The trial court judge ruled that the broker and the listing salesperson did not owe a fiduciary duty to the buyer. The jury ruled in favor of the listing agent and broker on all misrepresentation claims. The buyer appealed.
The appellate court reversed the trial court judge's ruling and found that the broker, and listing agent, both owed fiduciary 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.
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