A California dual agent is helping both the buyer and seller complete a purchase agreement. The buyer requests that an assignment clause be included in the offer, which would allow the buyer to transfer contractual rights to a third party before closing. The seller has not been informed of the buyer's intent to assign. Under California law, what is the dual agent's obligation regarding this clause?
Correct Answer
A) Present the offer with the assignment clause to the seller, explain the clause's implications, and ensure the seller can make an informed decision before signing
A dual agent owes fiduciary duties to both the buyer and the seller simultaneously. Under California Civil Code §2079.16 and the general duties of a dual agent, the agent must ensure that both parties are fully informed of all material terms in the purchase agreement before signing. An assignment clause is a material term that could significantly affect the seller's interests — for example, by substituting an unknown third party as the buyer. The dual agent must present the complete offer, including the assignment clause, and ensure the seller understands its implications before the seller decides whether to accept.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
In real estate, a client is someone to whom the agent owes fiduciary duties through an agency relationship, while a customer is a third party to whom the agent owes only honesty and fair dealing.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
More Laws Of Agency Fiduciary Duties Questions
A property sold for $450,000. The commission rate was 6%. If the listing broker received 60% of the total commission, how much did the listing broker receive?
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An agent needs to disclose a conflict of interest to the affected parties when a principal or service provider in the transaction is the agent’s:
A broker who simultaneously represents the best interests of both opposing parties in a transaction is known as a(n):
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