On behalf of Anthony F. Geraci of Geraci Law Firm posted in Real Estate
Disputes on Monday, June 29, 2015.
Real estate brokers in California and all other states are having to confront
changing times and practices in the residential market. One of the things
that has changed substantially over recent years is the growing right
of home buyers to have their own real estate agent representing their
interests. More than that, listing agents and brokers must now be careful
not to get into a conflict of interest situation when trying to handle
both the seller's and buyer's rights in a residential real estate
To prove that point, the National Association of Exclusive Buyer Agents
(NAEBA) has filed an "amicus curiae" brief before the California
Supreme Court in a case where a buyer sued the Coldwell Banker real estate
organization. The buyer's claim is that because the listing agent
was an agent of the same broker as the buyer's own agent, the listing
agent also owed him and the buyer the same fiduciary duty. This presumably
means that the listing agent, who was originally signed to represent the
seller, must give equal information and assistance to the buyer.
A California appellate court agreed, holding that when a broker is the
dual agent of the seller and buyer in a real property transaction, the
salespersons under the broker owe the same fiduciary duty equally to buyer
as well as the seller. The problem with that premise is, however, that
it is generally an impossibility for a seller's agent to give the
same degree of fiduciary loyalty to the buyer as well. According to the
president of the NAEBA, the situation of dual agency under the same broker
is an "impossible situation" which should not be allowed.
The NAEBA chose to file a brief in the California case because the organization
sees the serious risks and pitfalls of a dual agency situation in a residential
real estate transaction. It wants to enlighten consumers and the industry
with respect to potential conflicts in the real estate industry. The fact
is that the rights of buyers, which were traditionally treated more cavalierly,
are now as equally important to the successful completion of a transaction.
Source: digitalmedianet.com, "Real Estate Organization Files Brief on Behalf of Home Buyer", June 26, 2015