Realtor Fiduciary Duty Attorneys in Saratoga, CA
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Request a Free Consultation →Understanding Breach of Fiduciary Duty by Real Estate Agents in California
Real estate agents and brokers in California owe their clients fiduciary obligations, including duties of loyalty, disclosure, honesty, and reasonable care.
This includes undivided loyalty, full and honest disclosure, and the duty to act in the client's best interest above their own. This is a distinct legal claim from breach of fiduciary duty by business partners or corporate officers, and it arises specifically from the agency relationship created when a buyer or seller retains an agent under a listing or representation agreement.
Claims against an agent commonly arise out of the same facts as purchase and sale disputes, and sometimes alongside CC&R violations that were never disclosed.
Common breaches of a real estate agent's fiduciary duty take several forms.
Common breaches include:
- Failing to disclose a known material defect in the property.
- Representing both the buyer and seller without proper written consent (undisclosed dual agency).
- Steering a client toward a deal that benefits the agent's commission rather than the client.
- Failing to present all offers received on a property.
California's licensing law, along with disclosure statutes specific to residential transactions, sets minimum standards agents must meet, but the fiduciary duty owed to their own client generally goes further than these baseline disclosure obligations.
An agent's breach of trust can cause substantial losses on what is often a person's largest financial decision.
Losses can range from overpaying for a property with undisclosed issues to losing a deal because an agent failed to communicate a competing offer. Claims against real estate professionals can also be reported to the California Department of Real Estate, but pursuing a civil claim is often necessary to recover the financial losses the breach actually caused.
Dual agency, one agent or brokerage representing both the buyer and the seller, is lawful in California when it is properly disclosed.
A dual agency claim usually does not turn on the fact that the agent represented both sides, but on whether that dual role was disclosed in writing and consented to, and on what the agent actually did with the information once both parties were their clients. An agent who steers a deal to protect a commission, withholds material information from one side to benefit the other, or never obtains informed consent can face liability even where dual agency itself was permitted. Whether your transaction raises that kind of problem usually comes down to the disclosure paperwork and the agent's conduct during the deal.
Two things people assume, and both are worth checking. The first is that the arbitration provision in the purchase agreement ends the discussion. Whether a particular provision covers a particular claim, and whether it was properly agreed to, are questions with real answers and they are not always the ones the other side would prefer. The second is that the loss is too small to be worth pursuing. That depends on the claim, because some of these matters carry a path to fees and some do not, and it is a calculation worth doing before you write it off. Send us the purchase agreement and the disclosures and we will tell you what we see.
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Realtor Fiduciary Duty FAQs
A real estate agent generally owes their client undivided loyalty, confidentiality, full and honest disclosure of material facts, reasonable care and skill, and the duty to act loyally in the client's interests rather than placing the agent's own interests first, even when that conflicts with the agent's own commission or convenience.
Dual agency occurs when one agent or brokerage represents both the buyer and seller in the same transaction. California law permits this only with informed written consent from both parties, because representing both sides creates an inherent conflict of interest that can compromise the agent's loyalty to either client.
Yes, if your agent knew about a material defect and failed to disclose it to you, this can support a breach of fiduciary duty claim, separate from any disclosure obligations owed by the seller. Agents are expected to disclose facts within their knowledge that could affect your decision to buy or the price you're willing to pay.
An agent generally has a duty to present all written offers to their seller client promptly, regardless of whether the agent believes the offer is worth considering. Failing to do so can constitute a breach of fiduciary duty, potentially costing the seller a better deal.
If your agent made a false statement about a material fact and you relied on it, you may have claims for fraud or misrepresentation in addition to breach of fiduciary duty. What matters is what the agent knew, when they knew it, and what they told you, so gathering your emails, texts, and disclosure documents early is a good first step before speaking with an attorney.
In many circumstances, yes. Real estate agents and brokers owe fiduciary duties to their clients, and a breach of those duties, such as concealing a defect, failing to present an offer, or acting in their own interest rather than yours, can support a civil claim in addition to any complaint filed with the Department of Real Estate.
A fiduciary duty claim focuses on the trust-based relationship between an agent and their client, rather than just the terms of a listing agreement. This can allow for broader remedies and, in some cases, claims for the agent's self-dealing or conflicts of interest that a simple contract claim wouldn't reach.
The applicable limitations period depends on the legal theory and nature of the alleged misconduct. Breach-of-fiduciary-duty claims often fall under a four-year period, while fraud-based claims may be governed by a three-year period running from discovery, when the breach was or reasonably should have been discovered.
These options are not mutually exclusive. A complaint to the California Department of Real Estate can result in professional discipline against the agent's license, but it does not compensate you for financial losses. A civil claim is generally necessary to recover damages caused by the agent's breach of duty.
Whether an omission is actionable generally depends on whether the information was material to your decision and whether your agent knew or should have known about it. Agents generally have a duty to disclose facts within their knowledge that could affect your decision to buy, sell, or the price you're willing to accept, so the specific facts of what was known and withheld matter.
Dual agency is lawful in California with proper written disclosure and informed consent, so the fact that your agent represented both sides is usually not, by itself, a claim. The more relevant questions are typically whether that consent was properly obtained and what the agent did with the information from both sides once the dual relationship began.
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