CACI 4108 Failure of Seller’s Real Estate Broker to Conduct Reasonable Inspection—Essential Factual Elements (Civ. Code, § 2079)

California Civil Jury Instructions CACI

4108 Failure of Seller’s Real Estate Broker to Conduct Reasonable Inspection—Essential Factual Elements (Civ. Code, § 2079)

[Name of defendant], as the real estate [broker/salesperson] for [name of seller], must conduct a reasonably competent and diligent visual inspection of the property offered for sale. Before the sale, [name of defendant] must then disclose to [name of plaintiff], the buyer, all facts that materially affect the value or desirability of the property that the investigation revealed or should have revealed.

[Name of plaintiff] claims that [he/she/nonbinary pronoun/it] was harmed by [name of defendant]’s breach of this duty. To establish this claim, [name of plaintiff] must prove all of the following:

1.That [name of defendant] was [name of seller]’s real estate [broker/salesperson];

2.That [name of defendant] acted on [name of seller]’s behalf for purposes of [insert description of transaction, e.g., “selling a residential property”];

3.That [name of defendant] failed to conduct a reasonably competent and diligent visual inspectionof the property;

4.That before the sale, [name of defendant] failed to disclose to [name of plaintiff] all facts that materially affected the value or desirability of the property that such an inspection would have revealed;

5.That [name of plaintiff] was harmed; and

6.That [name of defendant]’s conduct was a substantial factor in causing [name of plaintiff]’s harm.

Directions for Use

Give this instruction if the seller’s real estate broker or salesperson did not conduct a visual inspection of the property and make disclosures to the buyer as required by Civil Code section 2079(a). For an instruction on the fiduciary duty of a real estate broker to the broker’s own client, see CACI No. 4107, Duty of Disclosure of Real Estate Broker to Client.

The duty created by Civil Code section 2079 is not a fiduciary duty; it is strictly a limited duty created by statute. (See Michel v. Moore & Associates, Inc. (2007) 156 Cal.App.4th 756, 762 [67 Cal.Rptr.3d 797].)

Sources and Authority

Statutory Duties of Seller’s Real Estate Broker. Civil Code section 2079(a).

Scope of Required Inspection. Civil Code section 2079.3.

“Section 2079 requires sellers’ real estate brokers, and their cooperating brokers, to conduct a ‘reasonably competent and diligent visual inspection of the property,’ and to disclose all material facts such an investigation would reveal to a prospective buyer.” (Field v. Century 21 Klowden-Forness Realty (1998) 63 Cal.App.4th 18, 23 [73 Cal.Rptr.2d 784], footnote omitted.)

“Section 2079 was enacted to codify and focus the holding in Easton v. Strassburger, supra, 152 Cal. App. 3d 90. In Easton, the court recognized that case law imposed a duty on sellers’ brokers to disclose material facts actually known to the broker. Easton expanded the holdings of former decisions to include a requirement that sellers’ brokers must diligently inspect residential property and disclose material facts they obtain from that investigation. Further, the case held sellers’ brokers are chargeable with knowledge they should have known had they conducted an adequate investigation.” (Field, supra, 63 Cal.App.4th at p. 24, original italics.)

“Section 2079 statutorily limits the duty of inspection recognized in Easton to one requiring only a visual inspection. Further, the statutory scheme expressly states a selling broker has no obligation to purchasers to investigate public records or permits pertaining to title or use of the property.” (Field, supra, 63 Cal.App.4th at p. 24, original italics; see Civ. Code, § 2079.3.)

“The statutory duties owed by sellers’ brokers under section 2079 are separate and independent of the duties owed by brokers to their own clients who are buyers.” (William L. Lyon & Associates, Inc. v. Superior Court (2012) 204 Cal.App.4th 1294, 1305 [139 Cal.Rptr.3d 670].)

“In accordance with the clear and unambiguous language of section 2079, the inspection and disclosure duties of residential real estate brokers and their agents apply exclusively to prospective buyers, and not to other persons who are not parties to the real estate transaction. Only a transferee, that is, the ultimate purchaser, can recover from a broker or agent for breach of these duties.” (Coldwell Banker Residential Brokerage Co. v. Superior Court (2004) 117 Cal.App.4th 158, 165 [11 Cal.Rptr.3d 564].)

“[W]e are not persuaded by Defendants’ reliance on Civil Code section 2079. Although we agree that that statute sets forth some of the duties of a real estate broker, it is not the only source of a broker’s duties. ‘Real estate brokers are subject to two sets of duties: those imposed by regulatory statutes, and those arising from the general law of agency.’ ” (Ryan v. Real Estate of the Pacific, Inc. (2019) 32 Cal.App.5th 637, 646 [244 Cal.Rptr.3d 129].)

Secondary Sources

3 Witkin, Summary of California Law (11th ed. 2017) Agency and Employment, § 174
Greenwald et al., California Practice Guide: Real Property Transactions, Ch. 2-C, Broker’s Relationship And Obligations To Principal And Third Parties, ¶ 2:173 et seq. (The Rutter Group)
3 California Real Estate Law and Practice, Ch. 63, Duties and Liabilities of Brokers, § 63.20 (Matthew Bender)
10 California Forms of Pleading and Practice, Ch. 103, Brokers, § 103.31 et seq. (Matthew Bender)
2A California Points and Authorities, Ch. 31, Brokers and Salespersons, § 31.142 et seq. (Matthew Bender)
9 California Legal Forms, Ch. 23, Real Property Sales Agreements, § 23.20 (Matthew Bender)
Miller & Starr, California Real Estate 4th, § 1:41 (Thomson Reuters)