California Supreme Court to Live-Stream Oral Arguments on Case Determining Representation in Dual Agency Real Estate Transactions

Dec 11, 2017Agency Issues

On September 7, 2016, the California Supreme Court will be hearing oral arguments on a case that could have ramifications for how real estate agents work not only in California, but across the country. Hiroshi Horiike v Coldwell Banker Residential Brokerage Company et. al. calls into question the representation owed by real estate agents and brokers to the parties of a dual agency transaction.

In the State of California, dual agency occurs when a single brokerage (even if there are two agents) represent both the buyer and the seller in a transaction. Mr. Horiike was buying a property with one Coldwell Banker agent and the home he purchased was listed with another Coldwell Banker agent. After purchasing the home, Mr. Horiike discovered that the home was considerably smaller than had been represented by the listing agent and that the listing agent was aware of the discrepancy in the published square footage and the actual square footage. Mr. Horiike sued the listing agent and Coldwell Banker for breach of fiduciary duty alleging that since he was a client of Coldwell Banker, the listing agent owed him the same fiduciary duties as his buyer agent.

While Horiike lost the initial case, he prevailed upon appeal. The Court of Appeal stated, “When a broker is the dual agent of both the buyer and the seller … the salespersons acting under the broker have the same fiduciary duty to the buyer and the seller as the broker.” The Court also found that the listing agent breached his fiduciary duty to Horiike because he did not disclose known material information about the square footage of the home. Coldwell Banker has appealed to the California Supreme Court.

In March, 2015, the National Association of Exclusive Buyer Agents (NAEBA) filed an Amicus Curiae Brief in support of the plaintiff, Hiroshi Horiike. In it, NAEBA states, “(NAEBA) believes that the Court of Appeal’s interpretation of the Civil Code is entirely correct. No other industry allows agents to work both sides of the fence, or to do so without paying a price or taking on heightened responsibility.” It goes on to add, “What is really at stake here is transparency, which is lacking in the real estate industry. Many common practices cloud the public’s awareness of how real estate professionals work. Most people think that ‘their’ ‘agent’ – the associate showing them homes – represents them exclusively. That is not always the case.” NAEBA’s Amicus Curiae Brief can be read in its entirety at

The case is currently scheduled for oral arguments on Wednesday, September 7, 2016 at 9:00am PDT in San Francisco and will broadcast live online. According to a notice posted on the California Supreme Court website, “The webcast can be accessed through website buttons posted at the time of oral argument on the California Courts website (the home page, the court’s home page and calendar page). There will be buttons that link to the live video stream and the captioning in English and Spanish.”

Be sure this doesn’t happen to you. Find an Exclusive Buyer Agent who will fully represent you when purchasing your next home.


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