“Agency law” matters in the real estate brokerage business. Fiduciary duties, company wide, to a client, matter. We, at Praedium Real Estate Services, strive to avoid conflicts of interest. One of those self evident conflicts revolves around “self dealing”.
A law suit, recently filed in California, brings to light when a real estate “agent” is alleged to have crossed the line. Baghdasarian versus Cortazzo illustrates this situation. This article well describes the background behind a well known real estate listing agent who ended up becoming the buyer of one of his own listings.
Often, the lines of representation are blurred in a real estate transaction. This is especially true when a dual agency occurs. Dual agency is actually put on steroids when the buyer ends up being the agent who was FIRST hired to represent the sellers.
It will be interesting to see how this plays out. Mr. Cortazzo is also the defendant in a breach of fiduciary case that is presently before the California Supreme Court. The case is commonly referred to as Horiike . It is to be argued in San Fransisco September , 2016. A decision is due as early as December 2016.