A California dual agent broker earns both sides of a 6% commission on a $600,000 sale. The buyer later discovers the broker knew of a material property defect that was never disclosed. If the buyer pursues litigation, which legal theory is most directly applicable?
Correct Answer
B) Breach of fiduciary duty; the broker's interest in both commission sides conflicted with the loyalty owed the buyer
A dual agent earning both commission sides has a financial reason to keep a deal together, and the buyer was owed loyalty against exactly that pull. Other choices: negligence per se needs a statute that fixes the standard, and no statute makes any undisclosed defect automatic; fraud needs intent to deceive, which is a further step; and breach of contract points at the purchase agreement rather than at the relationship the broker actually broke.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A relationship where a listing broker authorizes other brokers to act as agents of the seller, extending the seller's agency relationship to cooperating brokers.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
More Laws Of Agency Fiduciary Duties Questions
Under California law, the agency disclosure requirements apply to which types of property?
Under California law, when must a buyer's agent give the agency disclosure form to the buyer?
A broker who fails to promptly disclose their dual agency status is subject to:
A broker’s fiduciary obligation to protect a seller’s confidential information continues:
A broker has an exclusive agency listing on a property. If the owner sells the property, the broker is entitled to:
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