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Does Fiduciary Duty Extend Further When Under the Same Broker?

June 12, 2014

How far does an agent's fiduciary duty extend when both the buyer's and seller's rep are licensed under the same broker? 

When the purchaser of a luxury residence in Malibu, Calif., discovered that the home's square footage was significantly less than the listing rep's MLS listing, the purchaser filed a complaint against the listing rep and broker, alleging intentional and negligent misrepresentation and breach of fiduciary duty, among other counts. 

While the trial court initially granted the listing rep's motion for nonsuit on the count of breach of fiduciary duty, a California court of appeal reversed the decision, stating that “a broker’s fiduciary duty to his client requires the highest good faith and undivided service and loyalty.” And where, as in this case, a dual agency relationship has been created by merit of two salespersons licensed under the same broker representing a buyer and a seller, each salesperson owes not only his or her own client those fiduciary duties, but also owes them to the other salesperson’s client

Read the NAR Legal Affairs staff's summary of Horiike v. Coldwell Banker et. al., and visit Legal Case Summaries for weekly updates on cases that impact REALTORS® and the real estate industry.