Today's Law As Amended

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AB-1059 Dual agency: commercial real estate transactions.(2017-2018)



SECTION 1.

 Section 2079.21.5 is added to the Civil Code, to read:

2079.21.5.
 (a) Notwithstanding any other law, an agent shall not act as a dual agent in a commercial real estate transaction.
(b) Notwithstanding any other law, a brokerage firm, broker, or any of its associate licensees shall not act as an agent for both a seller and a buyer in the same commercial real estate transaction. Notwithstanding any other law, a brokerage firm, broker, or any of its associated licensees shall not act as a dual agent in connection with its representation of any principal.
(c) Notwithstanding any other law, for the purposes of this section, the following definitions shall apply:
(1) “Seller” includes any person or entity that leases or sells, offers to lease or sell, intends to lease or sell, or is interested in leasing or selling commercial real estate that he, she, or it owns or controls. “Seller” includes a lessor and landlord.
(2) “Buyer” includes any person or entity that leases or buys, offers to lease or buy, intends to lease or buy, or is interested in leasing or buying commercial real estate from seller. “Buyer” includes a lessee and tenant.
(3) “Commercial real estate transaction” includes any negotiation regarding an agreement or the consummation of an agreement to lease, purchase, or sell commercial real estate between a seller and a buyer.
(4) “Brokerage firm” means a business entity that is engaged in brokerage services for the lease, purchase, or sale of commercial real estate.
(5) “Broker in charge” means the individual broker responsible for an office.
(6) “Brokerage services” means those real property activities requiring a license under Chapter 3 (commencing with Section 10130) of Part 1 of Division 4 of the Business and Professions Code.
(7) “Commercial real estate” means any estate specified by paragraph (1) or (2) of Section 761 in property that constitutes or is improved with any commercial real property, any leasehold in these types of property exceeding one year’s duration, and mobilehomes, when offered for sale or sold through an agent pursuant to Section 10131.6 of the Business and Professions Code.
(8) “Dual agent” means any brokerage firm or broker that represents both a seller and a buyer in the same transaction. A “dual agent” includes the broker in charge and all agents, licensees or other representatives of the broker in charge and the brokerage firm.
(9) “Principal” means the person or entity with which a brokerage firm and its licensees has an agency relationship related to the negotiation and lease, purchase, or sale of an interest in real estate. Brokerage firms and their licensees owe a fiduciary duty to their principals. “Principal” also means client.
(10) “Fiduciary duty” means the duty to act for the benefit of the principal in all matters relating to the agency relationship. A fiduciary shall put the interest of the principal ahead of the interests of the fiduciary and any third party. Fiduciaries shall disclose all material facts the fiduciary learns about the transaction, shall disclose any knowledge gained from other parties to the principal’s transaction, shall protect the principal’s confidences, and act with reasonable care and obedience toward the principal. Unless otherwise agreed, the duty to protect a principal’s confidences continues after the brokerage service agreement expires or is otherwise terminated.
(11) “Licensee” means a person or entity holding any license under Chapter 3 (commencing with Section 10130) of Part 1 of Division 4 of the Business and Professions Code issued by the Real Estate Commissioner.