Real Estate Agent Disputes FAQ

California real estate agents owe their clients comprehensive fiduciary duties under Civil Code Sections 2079-2079.24 and common law. The duty of loyalty requires agents to act solely in their client's best interests and avoid conflicts of interest. Agents cannot represent both buyer and seller without full written disclosure and informed consent from both parties. The duty of care requires agents to exercise reasonable skill and diligence in representing clients, including providing accurate information, conducting appropriate research, and competently handling transaction details.

The duty of disclosure requires agents to disclose all material facts known to them that might affect the client's decisions, including information about the property, market conditions, and the agent's own interests. The duty of obedience requires agents to follow their client's lawful instructions. The duty of accounting requires agents to properly handle client funds and provide accurate financial records. The duty of confidentiality requires agents to protect client information. Breach of any fiduciary duty can result in liability for damages, disgorgement of commissions, and potential disciplinary action by the Department of Real Estate.

Under California law, real estate agents earn commissions based on the terms of their listing agreement or buyer representation agreement. Generally, a listing agent earns a commission when they produce a buyer ready, willing, and able to purchase on the seller's terms, or on terms the seller accepts. The commission is typically earned when the sale closes, but the listing agreement may specify different conditions. If the seller refuses to sell after the agent produces a qualified buyer, the agent may still be entitled to the commission depending on contract terms.

If the sale fails due to seller's fault, such as failure to clear title or breach of contract, the seller may still owe the commission. Agents representing buyers typically earn commissions from the seller's agent commission split or from buyer broker agreements. California Business and Professions Code Section 10136 requires that commission agreements be in writing to be enforceable. Commission amounts are negotiable and not fixed by law or regulation. Common commission disputes involve cancelled transactions, disagreements about procuring cause, and unauthorized dual agency.

When a California real estate agent's negligence causes harm, clients have several potential remedies. Civil claims for professional negligence can be filed in court seeking compensatory damages for losses caused by the agent's failure to meet the standard of care. Damages may include overpayment for property due to agent's failure to disclose problems, repair costs for undisclosed defects the agent should have revealed, lost profit on sales harmed by agent's errors, and transaction costs from failed deals.

Breach of fiduciary duty claims provide additional remedies when the agent failed to act in the client's best interests. Clients may file complaints with the California Department of Real Estate (DRE), which can investigate and discipline agents through license suspension, revocation, or other sanctions. If the agent was employed by a brokerage, the broker may share liability under the doctrine of respondeat superior. The statute of limitations for professional negligence is generally two years under Code of Civil Procedure Section 339. Document all interactions with your agent and preserve evidence of damages.

Dual agency occurs when one real estate agent or brokerage represents both the buyer and seller in the same transaction. California Civil Code Section 2079.17 regulates dual agency and requires specific disclosures and consents. Before entering dual agency, the agent must provide written disclosure explaining dual agency relationships and obtain written consent from both parties. In dual agency, the agent cannot advocate for either party's interests over the other, cannot disclose confidential price or negotiation information without permission, and must treat both parties fairly.

Many experts recommend against dual agency because it inherently limits the representation each party receives. Clients can refuse dual agency and require separate representation. If dual agency was not properly disclosed or you did not provide informed consent, the representation may be voidable. Undisclosed dual agency is a serious violation that can result in loss of commission, liability for damages, and license discipline. Clients harmed by improper dual agency can file DRE complaints and pursue civil claims for breach of fiduciary duty and fraud.

California clients can generally terminate their relationship with real estate agents, but consequences depend on the terms of the written agreement. Review your listing agreement or buyer representation agreement for termination provisions, including notice requirements, cancellation fees, and protection periods. Many listing agreements include automatic termination provisions allowing either party to cancel with written notice. Some agreements require payment of marketing costs or cancellation fees if terminated early.

Protection periods or safety clauses may entitle the agent to a commission if the property sells to someone they introduced during a specified period after termination. If the agent has materially breached their duties through negligence, breach of fiduciary duty, or misconduct, you may have grounds to terminate without penalty. Document any agent misconduct or breach that supports your termination. Provide written notice of termination as specified in your agreement. If the agent refuses to release you or claims improper fees, consult an attorney. Complaints about agent conduct can be filed with the California Department of Real Estate. Changing agents mid-transaction can complicate deals, so carefully consider timing.

California real estate agents have extensive disclosure obligations under Civil Code Section 2079 and related statutes. Listing agents must conduct a reasonably competent visual inspection of accessible areas of residential property and disclose material facts discovered to prospective buyers. Buyer's agents must disclose material facts they discover or should discover through reasonable inspection. Both agents must disclose their agency relationship, including any dual agency, in writing.

Agents must disclose any interests they have in the transaction, including referral fees, ownership interests, or personal relationships with other parties. Agents must disclose facts materially affecting the value or desirability of property that they know or should know through reasonable diligence. Environmental hazards, zoning issues, neighborhood conditions, and transaction problems must be disclosed. Agents must provide required statutory disclosures including the Transfer Disclosure Statement, Natural Hazard Disclosure, and applicable local disclosures. Failure to disclose material facts can result in liability for fraud, negligent misrepresentation, and breach of fiduciary duty. Agents cannot hide behind seller's failure to disclose if they independently knew or should have known of material facts.

California brokers can be held liable for their agents' misconduct under several legal theories. Under Business and Professions Code Section 10177(h), brokers have a duty to supervise their agents and can face license discipline for failure to supervise. Vicarious liability through respondeat superior makes brokers liable for agents' negligent acts committed within the scope of their employment or agency relationship. Brokers can be directly liable for negligent hiring, training, or supervision if they knew or should have known an agent was unfit.

Ratification occurs when brokers approve or accept benefits from agents' wrongful conduct. When pursuing claims against agents, consider whether the broker shares liability, as brokers typically have deeper pockets and insurance coverage. Errors and omissions insurance policies often cover both agents and their supervising brokers. Claims against brokers may also involve the brokerage company as a separate entity. The broker's responsibility includes ensuring agents comply with disclosure requirements, follow proper procedures, and maintain required licenses. Document communications with both the agent and their supervising broker when building a case.

Complaints against California real estate agents can be filed with the Department of Real Estate (DRE) and through civil litigation. DRE complaints are filed online or by mail using the RE 519 complaint form. Include detailed descriptions of the agent's conduct, dates, names of parties involved, and copies of relevant documents such as contracts, disclosures, and correspondence. The DRE will investigate and may take disciplinary action including license suspension, revocation, or restricted license.

DRE complaints are appropriate for license law violations, fraud, misrepresentation, negligence, breach of fiduciary duty, and failure to supervise. DRE proceedings do not provide monetary compensation to victims. For monetary damages, file a civil lawsuit in California Superior Court or small claims court if damages are under the small claims limit. Many real estate disputes require mediation before litigation under standard contract provisions. Consider filing complaints with local real estate associations if the agent is a Realtor, as associations have their own ethics enforcement. The statute of limitations varies by claim type, so act promptly. Document all losses and preserve evidence.

California law requires listing agents to present all offers to their seller clients promptly. Business and Professions Code Section 10176(f) makes failure to present offers grounds for license discipline. If your listing agent failed to present an offer, this likely constitutes breach of fiduciary duty and may support claims for damages if you can prove harm. Damages might include the difference between the unpresented offer and the eventual sale price, or lost opportunity if the property did not sell.

If you are a buyer whose offer was not presented, you may have claims against the listing agent for tortious interference with prospective economic advantage if they intentionally suppressed your offer. Document evidence that your offer was submitted, the agent received it, and it was not communicated to the seller. File a DRE complaint against the agent. If you can prove the seller would have accepted your offer, you may have claims for damages equal to the lost transaction. Agents sometimes claim they did not receive offers or received them after the property was under contract; preserve timestamped documentation of offer submission.

Statutes of limitations for claims against California real estate agents vary by claim type. Professional negligence claims against agents have a two-year limitation period under Code of Civil Procedure Section 339, running from when the plaintiff discovered or should have discovered the injury and its cause. Fraud claims have a three-year limitation period under Section 338(d), with the period beginning upon discovery of the fraud. Breach of fiduciary duty claims typically have a four-year limitation period for claims based on written agreements and two years for those based on oral agreements or conduct.

Breach of contract claims have a four-year limitation for written contracts under Section 337. The discovery rule can toll these periods when the plaintiff could not reasonably have discovered the wrong. This is particularly relevant in real estate transactions where problems may not become apparent until years after closing. File DRE complaints promptly as well, though the DRE can investigate conduct going back several years. Begin documenting issues as soon as you suspect agent misconduct and consult an attorney promptly to avoid missing deadlines.