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Your real estate agent's fiduciary duties

If your business is growing, you may be in the market for real estate that will accommodate your expansion. You may already have your eye on a piece of property with a building that will suit your needs, or you may be relying on your real estate agent to do the searching for you. However, are you aware of the duties and responsibilities your agent has toward you?

In the first place, you should understand whether your California real estate professional is acting in the legal capacity of an agent rather than a representative. In fact, true agency in real estate is rare and exists only through a legal agreement between you and the agent. If you have a client/agent relationship with your real estate professional, the agent owes you a fiduciary duty.

What are an agent's duties?

The first duty you should expect from your agent is obedience. Your agent works for you and should do as you direct within the scope of the law. Next, you can expect your real estate agent to be loyal. This means he or she acts with your best interests in mind and not for personal gain. For example, your agent should never pressure you to purchase a property that does not suit your needs just because the agent has a financial interest in the property.

With these two qualities established, your agent should provide the following according to the terms of your contract:

  • Disclosure of every material factor that would influence your decision to purchase a property or to pass on it
  • Confidentiality in all matters even after the sale is complete and the contract expires
  • Scrupulous accounting for all money and assets entrusted to your agent
  • Diligent attention and care to do the job with reasonable competence

An agent who fails in any of these areas may be in breach of his or her fiduciary duties. This could leave you vulnerable to personal or financial damages that could harm your business or prevent your planned expansion.

Remedies

Even if you suffer no damages, the breach of your agent's duties toward you may be enough for the courts to agree to rescind the contract. This may include cancelling the purchase of a property.

If your agent fails to adequately perform his or her fiduciary duties, a court may rule that you owe no payment to that agent and that, in fact, the agent must refund to you any commission you already paid. You may win additional damages, depending on the circumstances of the breach and the cost to you and your company. An attorney with experience and skill in civil litigation will work to obtain for you the most positive resolution possible for your situation.

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Chodos & Associates
1880 Century Park East
Suite 615
Los Angeles, CA 90067

Toll Free: 866-986-7255
Phone: 310-598-3405
Fax: 310-203-3866
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