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Agent had duty to disclose discrepancy
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SAN FRANCISCO (AP) — A real estate agent who represented the seller of a Malibu mansion and worked for the same firm as the buyer’s agent had a responsibility to disclose a discrepancy in the home’s size, the California Supreme Court said Monday.
The court ruled unanimously that salespeople working for so-called dual agent brokers have a responsibility to disclose all information affecting the value of the property regardless of which party they represent.
Dual-agent brokers represent both the buyer and seller of a property.
The California Association of Realtors had raised concerns that requiring such disclosures would force agents to turn over confidential information that they had learned from the buyer or seller.
The California Supreme Court said the lawsuit it ruled on did not raise that problem.
“Regardless of whether a listing agent also represents the buyer, it is required to disclose to the buyer all known facts materially affecting the value or desirability of a property that are not known to or reasonably discoverable by the buyer,” Associate Justice Leondra Kruger wrote.
June Barlow, general counsel for the California Association of Realtors, said the court’s ruling was narrow and that the association was fine with it.
The ruling came in a lawsuit against Coldwell Banker and one of its agents representing the seller of a Malibu home. The plaintiff, Hiroshi Horiike, was represented by another Coldwell Banker agent. He purchased the home, but alleged in a subsequent lawsuit that the seller’s agent had misrepresented its size to him as roughly 15,000 square feet when public records showed it had living space of under 10,000 square feet.
A call to an attorney for Coldwell Banker was not immediately returned.
The trial court concluded that the agent for the seller had no fiduciary duty to the buyer, and a jury found in favor of Coldwell Banker. An appeals court overturned that decision.
The California Supreme Court upheld the appellate court ruling, reviving Horiike’s lawsuit.