The Supreme Court of California hard a series of oral arguments regarding a specific case of a certain multimillionaire homebuyer on September 7. The person sued both listing brokerage and listing agent. The latter was acting as dual agent. The case was on a $12.25 million home brought in 2007. The property is in Los Angeles.
Unaware of right
The case clearly showed that even smart consumers are unaware of their much diminished rights after they submit to dual agency situation. The parties battled over interpretation of an agency law statute applicable in California State. The contention was also whether the said listing agent owed that homebuyer the identical fiduciary duties as the agent has given to his seller client. This is important as both the buyer agent and the listing agent worked for same listing brokerage-Coldwell Banker. There was a dispute over the belief of the homebuyer that the duty of the listing agent is to disclose any discrepancy concerning the square footage of the home.
The lawyers fighting for Coldwell Banker gave the argument that the concerned listing agent owed the fiduciary duties exclusively to seller. The buyer owed complete fiduciary duties exclusively to the buyer of the home. This is true even through Coldwell Banker is a dual agent and represented both the seller and the homebuyer in the said transaction.
Hiroshi Horiike, the plaintiffs' lawyers, offered the argument that since Coldwell Banker is a dual agent, it owed its homebuyer client the level fiduciary duties. It follows that the listing agent working for Coldwell Baker also owed the buyer of the home identical fiduciary duties.
In its argument, National Association of Exclusive Buyer Agents or NAEBA put forward the argument that few consumers can actually understand actual relationships between agents and teal estate brokers. Agents, in this case, can be licensed associates, who lists homes as requested by sellers and consequently show those residences to probable buyers. The NAEBA took the corner for Horiike in this case. The organization further said that majority of buyers are unable to fathom that a majority of brokers are not exclusive buyer agents- but simply an associate who works for a broker which represents both sellers and buyers.
In its brief to the Supreme Court, NAEBA argued that consumers do not understand that they get into contract with the broker- and not the associate. If the buyer shows interest in a property listed by same broker, then the associate and broker will become dual agents.