Real Estate Broker Fiduciary Duties & Fraud

As a matter of California law, a Real Estate Broker or Agent owes the highest duty of good faith, honesty and fair dealing to their client.  This duty is referred to as the Fiduciary Duty.  It is the same duty that is owed by attorneys to their clients or trustees to living trusts.  The California Civil Jury Instructions provides this explanation of what “Fiduciary Duty” means:  A fiduciary duty imposes on a real estate agent/real estate broker, a duty to act with the utmost good faith in the best interests of his/her/its client.  Thus, a real estate client is owed a duty of good faith, loyalty, honesty, reasonable care and fair dealing.

The California Civil Jury Instructions have a separate jury instruction specifically directed at the duty of disclosure by a Real Estate Broker which reads:

As a fiduciary, a real estate broker must disclose to his or her client all material information that the broker knows or could reasonably obtain regarding the property or relating to the transaction. The facts that a broker must learn, and the advice and counsel required of the broker, depend on the facts of the transaction, the knowledge and experience of the client, the questions asked by the client, the nature of the property, and the terms of sale. The broker must place himself or herself in the position of the client and consider the type of information required for the client to make a well-informed decision.

The purchase and sale of a residential or commercial property is usually the biggest and most significant transaction for most people.  Thus, the law charges real estate brokers and agents with the utmost duty allowed by law.

When a broker or agent either intentionally fails to disclose a known material fact to a buyer or is somehow negligible in performing his/her duties thereby causing damages or loss to a buyer or seller, then a claim for breach of fiduciary duty, negligence or fraud may be brought by the client, whether the client is the buyer or seller.  A broker representing a seller also owes a legal duty to disclose known facts to a buyer.  Although the duty owed to a buyer is not the highest fiduciary duty, the seller’s broker nevertheless owes a legal duty to the buyer.  A breach of this legal duty will support claims in fraud and negligence.

Our Los Angeles Real Estate Attorneys prosecute breach of fiduciary duty claims and fraud claims against real estate agents and brokers.  We have successfully resolved claims against brokers and are currently engaged in breach of fiduciary duty and fraud claims against some of the largest real estate brokerage firms in Los Angeles.

Certain disclosures such as the size of the lot or proximity to a flood zone are rarely the subject of a nondisclosure suit since most real estate transaction forms cover such standard disclosures.  It’s the atypical information about a home that sellers tend to conceal such as city ordinance violations, latent nuisances and defects or failed repairs.”  Artin Gholian as quoted in Yahoo! Finance

Talk to an experienced Attorney today. Call us now at (888) 693-5556.

Email an Attorney directly at