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clarify agency relationships and duties, California
law requires that a real estate broker disclose in writing
the duties which arise from certain agency relationships
and then disclose the broker’s status as agent
of the seller, agent of the buyer, or agent of both
the seller and buyer (dual agent). This requirement
applies to the sale, exchange, or lease for more than
a year of real property improved with one to four dwelling
units, or the sale of a mobile home.
It is not necessary or required to confirm an agency
relationship using a separate Confirmation form if the
agency confirmation portion of the Real Estate Purchase
Contract is properly completed in full. However, it
is still necessary to use this Disclosure form.
The required agency disclosure form must include
the following specific language:
DISCLOSURE REGARDING REAL ESTATE AGENCY
RELATIONSHIP
(As required by the Civil Code)
When you enter into a discussion with a real estate
agent regarding a real estate transaction, you should
from the outset understand what type of agency relationship
or representation you wish to have with the agent in
the transaction.
a) Listing Agent to a Seller before entering into a
listing agreement;
b) Buyer’s Agent to the Buyer as soon as soon
as practicable before signing an offer;
c) Buyer's Agent to the Seller before presenting an
offer;
d) Listing Agent, when acting as a dual agent, to the
Buyer as soon as practicable before the Buyer signs
an offer.
SELLER'S AGENT
A Seller's agent under a listing agreement with the
Seller acts as the agent for the Seller only. A Seller's
agent or a subagent of that agent has the following
affirmative obligations:
To the Seller:
A fiduciary duty of utmost care, integrity, honesty,
and loyalty in dealings with the Seller.
To the Buyer and the Seller:
(a) Diligent exercise of reasonable skill and care in
performance of the agent's duties.
(b) A duty of honest and fair dealing and good faith.
(c) A duty to disclose all facts known to the agent
materially affecting the value or desirability of the
property that are not known to, or within the diligent
attention and observation of the parties.
An agent is not obligated to reveal to either party
any confidential information obtained from the other
party that does not involve the affirmative duties set
forth above.
BUYER'S AGENT
A selling agent can, with a Buyer's consent, agree to
act as agent for the Buyer only. In these situations,
the agent is not the Seller's agent, even if by agreement
the agent may receive compensation for services rendered,
either in full or in part from the Seller. An agent
acting only for a Buyer has the following affirmative
obligations:
To the Buyer:
A fiduciary duty of utmost care, integrity, honesty,
and loyalty in dealings with the Buyer.
To the Buyer and the Seller:
(a) Diligent exercise of reasonable skill and care in
performance of the agent's duties.
(b) A duty of honest and fair dealing and good faith.
(c) A duty to disclose all facts known to the agent
materially affecting the value or desirability of the
property that are not known to, or within the diligent
attention and observation of the parties.
An agent is not obligated to reveal to either party
any confidential information obtained from the other
party that does not involve the affirmative duties set
forth above.
AGENT REPRESENTING BOTH SELLER & BUYER
A real estate agent, either acting directly or through
one or more associate licensees, can legally be the
agent of both the Seller and the Buyer in a transaction,
but only with the knowledge and consent of both the
Seller and the Buyer.
In a dual agency situation, the agent has the following
affirmative obligations to both the Seller and the Buyer.
(a) A fiduciary duty of utmost care, integrity, honesty,
and loyalty in the dealings with either Seller or the
Buyer.
(b) Other duties to the Seller and the Buyer as stated
above in their respective sections.
In representing both Seller and Buyer, the agent may
not, without the express permission of the respective
party, disclose to the other party that the Seller will
accept a price less than the listing price or that the
Buyer will pay a price greater than the price offered.
The above duties of the agent in a real estate transaction
do not relieve a Seller or Buyer from the responsibility
to protect his or her own interests. You should carefully
read all agreements to assure that they adequately express
your understanding of the transaction. A real estate
agent is a person qualified to advise about real estate.
If legal or tax advice is desired, consult a competent
professional.
Throughout your real property transaction you may receive
more than one disclosure form, depending upon the number
of agents assisting in the transaction. The law requires
each agent with whom you have more than a casual relationship
to present you with this disclosure form. You should
read its contents each time it is presented to you,
considering the relationship between you and the real
estate agent in your specific transaction.
This disclosure form includes the provisions of Sections
2079.13 to 2079.24, inclusive of the Civil Code set
forth in the next section. Read it carefully.
If the transaction involves one-to-four dwelling, residential
property(s), including a mobile home, this Disclosure
form must be provided in a listing, sale, exchange,
installment land contract, or lease over one year.
CHAPTER 2 OF TITLE 9 OF PART 4 OF DIVISION 3 OF THE
CIVIL CODE
2079.13 As used in Sections 2079.14
to 2079.24, inclusive, the following terms have the
following meanings:
(a) "Agent" means a person acting under provisions
of Title 9 (commencing with Section 2295), in a real
property transaction, and includes a person who is licensed
as a real estate broker under Chapter3 (commencing with
Section 10130) of Part 1 of Division 4 of the Business
and Professions Code, and under whose license a listing
is executed or an offer to purchase is obtained.
(b) "Associate licensee" means a person who
is licensed as a real estate broker or salesperson under
Chapter 3 (commencing with Section 10130) of Part 1
of Division 4 of the Business and Professions Code and
who is either licensed under a broker or has entered
into a written contract with a broker to act as the
broker's agent in connection with acts requiring a real
estate license and to function under the broker's supervision
in the capacity of an associate licensee.
The agent in the real property transaction bears responsibility
for his or her associate licensees who perform as agents
of the agent. When an associate licensee owes a duty
to any principal, or to any buyer or seller who is not
a principal, in a real property transaction, that duty
is equivalent to the duty owed to that party by the
broker for whom the associate licensee functions.
(c) "Buyer" means a transferee in a real property
transaction, and includes a person who executes an offer
to purchase real property from a seller through an agent,
or who seeks the services of an agent in more than a
casual, transitory, or preliminary manner, with the
object of entering into a real property transaction.
"Buyer" includes vendee or lessee.
(d) "Dual agent" means an agent acting, either
directly or through an associate licensee, as agent
for both the seller and the buyer in a real property
transaction.
(e) "Listing agreement" means a contract between
an owner of real property and an agent, by which the
agent has been authorized to sell the real property
or to find or obtain a buyer.
(f) "Listing agent" means a person who has
obtained a listing of real property to act as an agent
for compensation.
(g) "Listing price" is the amount expressed
in dollars specified in the listing for which the seller
is willing to sell the real property through the listing
agent.
(h) "Offering price" is the amount expressed
in dollars specified in an offer to purchase for which
the buyer is willing to buy the real property.
(i) "Offer to purchase" means a written contract
executed by a buyer acting through a selling agent which
becomes the contract for the sale of the real property
upon acceptance by the seller.
(j) "Real property" means any estate specified
by subdivision (1) or (2) of Section 761 in property
which constitutes or is improved with one to four dwelling
units, any leasehold in this type of property exceeding
one year's duration, and mobile homes, when offered
for sale or sold through an agent pursuant to the authority
contained in Section 1013.6 of the Business and Professions
Code.
(k) "Real property transaction" means a transaction
for the sale of real property in which an agent is employed
by one or more of the principals to act in that transaction,
and includes a listing or an offer to purchase.
(l) "Sell," "sale," or "sold"
refers to a transaction for the transfer of real property
from the seller to the buyer, and includes exchanges
of real property between the seller and buyer, transactions
for the creation of a real property sales contract within
the meaning of Section 2985, and transactions for the
creation of a leasehold exceeding one year's duration.
(m) "Seller" means the transferor in a real
property transaction, and includes an owner who lists
real property with an agent, whether or not a transfer
results, or who receives an offer to purchase real property
of which he or she is the owner from an agent on behalf
of another. "Seller" includes both a vendor
and a lessor.
(n) "Selling agent" means a listing agent
who acts alone, or an agent who acts in cooperation
with a listing agent, and who sells or finds and obtains
a buyer for the real property, or an agent who locates
property for a buyer or finds a buyer for a property
for which no listing exists and presents an offer to
purchase to the seller.
(o) "Subagent" means a person to whom an agent
delegates agency powers as provided in Article 5 (commencing
with Section 2349) of Chapter 1 of Title 9. However,
"subagent" does not include an associate licensee
who is acting under the supervision of an agent in a
real property transaction.
2079.14 Listing agents and selling
agents shall provide the seller and buyer in a real
property transaction with a copy of the disclosure form
specified in Section 2079.16, and, except as provided
in subdivision (c), shall obtain a signed acknowledgement
of receipt from that seller or buyer, except as provided
in this section or Section 2079.15, as follows:
(a) The listing agent, if any, shall provide the disclosure
form to the seller prior to entering into the listing
agreement.
(b) The selling agent shall provide the disclosure form
to the seller as soon as practicable prior to presenting
the seller with an offer to purchase, unless the selling
agent previously provided the seller with a copy of
the disclosure form pursuant to subdivision (a).
(c) Where the selling agent does not deal on a face-to-face
basis with the seller, the disclosure form prepared
by the selling agent may be furnished to the seller
(and acknowledgement of receipt obtained for the selling
agent from the seller) by the listing agent, or the
selling agent may deliver the disclosure form by certified
mail addressed to the seller at his or her last known
address, in which case no signed acknowledgement of
receipt is required.
(d) The selling agent shall provide the disclosure form
to the buyer as soon as practicable prior to execution
of the buyer's offer to purchase, except that if the
offer to purchase is not prepared by the selling agent,
the selling agent shall present the disclosure form
to the buyer not later than the next business day after
the selling agent receives the offer to purchase from
the buyer.
2079.15 In any circumstance in which
the seller or buyer refuses to sign an acknowledgement
of receipt pursuant to Section 2079.14, the agent, or
an associate licensee acting for an agent, shall set
forth, sign, and date a written declaration of the facts
of the refusal.
2079.17
(a) As soon as practicable, the selling agent shall
disclose to the buyer and seller whether the selling
agent is acting in the real property transaction exclusively
as the buyer's agent, exclusively as the seller's agent,
or as a dual agent representing both the buyer and the
seller. This relationship shall be confirmed in the
contract to purchase and sell real property or in a
separate writing executed or acknowledged by the seller,
the buyer, and the selling agent prior to or coincident
with execution of that contract by the buyer and the
seller, respectively.
(b) As soon as practicable, the listing agent shall
disclose to the seller whether the listing agent is
acting in the real property transaction exclusively
as the seller's agent, or as a dual agent representing
both the buyer and the seller. This relationship shall
be confirmed in the contract to purchase and sell real
property or in a separate writing executed or acknowledged
by the seller and the listing agent prior to or coincident
with the execution of that contract by the seller.
(a) The confirmation required by subdivision (a) and
(b) shall be in the following form:
_________________is the agent of (check one) ______________
is the agent of (check one)
(Name of listing agent) (Name of selling agent)
0 the seller exclusively; or 0 both the buyer and seller
0 the buyer exclusively; or 0both the buyer and the
seller
(b) The disclosures and confirmation required by this
section shall be in addition to the disclosure required
by Section 2079.14.
2079.18 No selling agent in a real
property transaction may act as an agent for the buyer
only, when the selling agent is also acting as the listing
agent in the transaction.
2079.19 The payment of compensation
or the obligation to pay compensation to an agent by
the seller or buyer is not necessarily determinative
of a particular agency relationship between an agent
and the seller or buyer. A listing agent and a selling
agent may agree to share any compensation or commission
paid, or any right to any compensation or commission
for which an obligation arises as the result of a real
estate transaction, and the terms of any such agreement
shall not necessarily be determinative of a particular
relationship.
2079.20 Nothing in this article prevents
an agent from selecting, as a condition of the agent's
employment, a specific form of agency relationship not
specifically prohibited by this article if the requirements
of Section 2079.14 and Section 2079.17 are complied
with.
2079.21 A dual agent shall not disclose
to the buyer that the seller is willing to sell the
property at a price less than the listing price, without
the express written consent of the seller. A dual agent
shall not disclose to the seller that the buyer is willing
to pay a price greater than the offering price, without
the express written consent of the buyer.
This section does not alter in any way the duty or responsibility
of a dual agent to any principal with respect to confidential
information other than price.
2079.22 Nothing in this article precludes
a listing agent from also being a selling agent, and
the combination of these functions in one agent does
not, of itself, make that agent a dual agent.
2079.23 A contract between the principal
and agent may be modified or altered to change the agency
relationship at any time before the performance of the
act which is the object of the agency with the written
consent of the parties to the agency relationship.
2079.24 Nothing in this article shall
be construed to either diminish the duty of disclosure
owed buyers and sellers by agents and their associate
licensees, subagents, and employees or to relieve agents
and their associate licensees, subagents, and employees
from liability for their conduct in connection with
acts governed by this article or for any breach of a
fiduciary duty or a duty of disclosure.
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