Broker Negligence and Breach of Fiduciary Duties
California law stipulates that every real estate broker or agent must adhere to what is called "fiduciary duty." This means that the agent or broker owes the highest duty of good faith, fairness, reasonable care, loyalty, and honesty to his or her client. California Civil Jury Instructions state that "A fiduciary duty imposes on a real estate agent/real estate broker, a duty to act with the utmost good faith in the best interests of his/her/its client."
Unfortunately, some real estate brokers do not act in the best interests of their clients. Instead, some brokers break the rules or act in a reckless or negligent manner, which could jeopardize the purchase or sale of a residential or commercial property.
There are many different ways a real estate broker or agent can act in a negligent manner or breach their fiduciary duties. These include:
- Failing to disclose a property defect
- Offering legal advice (real estate agents cannot do so in California)
- Failing to disclose other material facts (including problems with structure or foundation)
- Providing misleading information to buyers or sellers
- Failing to recommendation or arrange mandatory inspections
- Breach of contract (failing to adhere to terms of contract between agent and buyer or seller)
- Violating buyer's or seller's civil rights (including agent asking buyer or seller questions about their ethnicity, race, or sexual orientation)
A real estate agent or broker who causes damages or loss to a buyer or seller must be held accountable for his or her actions. Depending on the circumstances of your case, you could make a claim for breach of fiduciary duty, negligence, or fraud.