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Real Estate News And Advice
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February 12, 2012
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Response To: |
Debs v. Coldwell Banker Attorneys Prepare to Square Off
(Blanche Evans - 03/03/2000)
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Distorting a Universal Principal
Posted By: Leopold A. Rodriguez - 03/03/2000 05:40 PM
Certainly trust officers, attorneys, indeed all fiduciaries owe undivided loyalty to their principals. It is, is it not, inherent in the very concept. We, the public, demand it of them.
But The NAR insists that its members, fiduciaries all, be entitled to divide their loyalty. To this end it has sponsored legislation to create The Hybrids: sub-agency, dual agency, and now designated agency.
Michigan Avenue remains oblivious to the fact that it cannot create a Safe Harbor - even with the help of accommodating legislators - by repeatedly distorting a universal principle which the rest of the world, including the learned Judges, views in a totally antithetical light. So the claims keep coming.
In California the statutorily mandated agency disclosure form provides that licensees owe to the seller "a FIDUCIARY duty of UTMOST care, integrity, honesty and LOYALTY". Emphasis added. Same duty is owed to the buyer. Very good. But then "the folks" concocted the following duty owed by a dual agent to the seller and to the buyer: "A fiduciary duty of utmost care, integrity, honesty and loyalty." The same thing! NAR, its lobbyists, and legislative sympathizers apparently believe that one can stand the definition of fiduciary on its ears, just for Realtors, and all should understand.
Consistent with this oblivion The BRLI PAG blames the Appellate Courts for this mess, alleging that THEY are defining licensee duties and that THEY are erratic in their decisions!
As to "Debs". Certainly, it would be a conflict of interest for attorneys to represent two parties vying to purchase the same entity/property. So huge law firms track their extensive client databases to avoid any such conflict of interest. Are we to understand that a smaller brokerage cannot do the same? Are we to understand that it stretches economic realities to require such brokerages to do the same? Are we to understand that this very basic conflict of interest applies to all fiduciaries - except Realtors?
Furthermore, the argument that agency does not commence until an offer is accepted, is litigation-lawyer-speak. For purchasers working with licensees without a contract there may indeed be an "period of gray" as to exactly when the agency relationship begins. But there can be no doubt that when the licensee prepares the purchase offer, reviews negotiating strategy, recommends price/terms, obtains the purchaser's signature on the Agency Disclosure form - Houston, we've got agency!
Leopold A. Rodriguez
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