{"id":1877,"date":"2021-10-25T03:56:04","date_gmt":"2021-10-25T03:56:04","guid":{"rendered":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/?page_id=1877"},"modified":"2022-05-09T19:07:37","modified_gmt":"2022-05-09T19:07:37","slug":"caci-4107-duty-of-disclosure-by-real-estate-broker-to-client","status":"publish","type":"page","link":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/caci-4107-duty-of-disclosure-by-real-estate-broker-to-client\/","title":{"rendered":"CACI 4107 Duty of Disclosure by Real Estate Broker to Client"},"content":{"rendered":"\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-kv2bjpvy-6c87d3c919923573986c0f6f0b0391c4\">\n#top .av-special-heading.av-kv2bjpvy-6c87d3c919923573986c0f6f0b0391c4{\npadding-bottom:10px;\n}\nbody .av-special-heading.av-kv2bjpvy-6c87d3c919923573986c0f6f0b0391c4 .av-special-heading-tag .heading-char{\nfont-size:25px;\n}\n.av-special-heading.av-kv2bjpvy-6c87d3c919923573986c0f6f0b0391c4 .av-subheading{\nfont-size:15px;\n}\n<\/style>\n<div  class='av-special-heading av-kv2bjpvy-6c87d3c919923573986c0f6f0b0391c4 av-special-heading-h1 blockquote modern-quote  avia-builder-el-0  el_before_av_hr  avia-builder-el-first '><h1 class='av-special-heading-tag '  itemprop=\"headline\"  >CACI 4107 Duty of Disclosure by Real Estate Broker to Client<\/h1><div class='av-subheading av-subheading_below'><p>California Civil Jury Instructions CACI<\/p>\n<\/div><div class=\"special-heading-border\"><div class=\"special-heading-inner-border\"><\/div><\/div><\/div>\n<div  class='hr av-av_hr-91d7ccd583a503147498e120fee2ff9b hr-default  avia-builder-el-1  el_after_av_heading  el_before_avia_sc_search '><span class='hr-inner '><span class=\"hr-inner-style\"><\/span><\/span><\/div>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" 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action='https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/' id='searchform_element' method='get' class='' data-element_id='av-avia_sc_search-f7f83518637509acfac1c9900b84c1e7' ><div class='av_searchform_wrapper'><input type='search' value='' id='s' name='s' placeholder='Search CACI' aria-label='Search CACI' class='av-input-field ' required \/><div class='av_searchsubmit_wrapper '><input type='submit' value='Find' id='searchsubmit' class='button ' title='View results on search page' aria-label='View results on search page' \/><\/div><input type='hidden' name='numberposts' value='8' \/><input type='hidden' name='post_type' value='page' \/><input type='hidden' name='results_hide_fields' value='post_titles,meta,image' \/><\/div><\/form><\/search><\/div>\n<section  class='av_textblock_section av-av_textblock-e878f05c31dff72941bf1e49a00d9ff5 '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock'  itemprop=\"text\" ><ul>\n<li><a href=\"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/\">CACI Jury Instructions Index<\/a><\/li>\n<li><a href=\"https:\/\/caci-fillable-forms.crowdsourcelawyers.com\/\">App: CACI Jury Instructions Fillable Forms Word Format<\/a><\/li>\n<\/ul>\n<\/div><\/section>\n<div  class='hr av-av_hr-91d7ccd583a503147498e120fee2ff9b hr-default  avia-builder-el-4  el_after_av_textblock  el_before_av_textblock '><span class='hr-inner '><span class=\"hr-inner-style\"><\/span><\/span><\/div>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-kv2bkvcb-30a375e9ad951468eb928d8519319f07\">\n#top .av_textblock_section.av-kv2bkvcb-30a375e9ad951468eb928d8519319f07 .avia_textblock{\nfont-size:20px;\n}\n<\/style>\n<section  class='av_textblock_section av-kv2bkvcb-30a375e9ad951468eb928d8519319f07 '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock'  itemprop=\"text\" ><h2 class=\"SS_Banner\">4107\u00a0Duty of Disclosure by Real Estate Broker to Client<\/h2>\n<hr \/>\n<p><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">As a fiduciary, a real estate broker must disclose to the broker\u2019s client all material information that the broker knows or could reasonably obtain regarding the property or relating to the transaction.<\/span><\/p>\n<p><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">The facts that a broker must learn, and the advice and counsel required of the broker, depend on the facts of the transaction, the knowledge and experience of the client, the questions asked by the client, the nature of the property, and the terms of sale. Brokers must place themselves in the position of their clients and consider the type of information required for the client to make a well-informed decision.<\/span><\/p>\n<p><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">[A real estate broker cannot accept information received from another person, such as the seller, as being true, and transmit it to the broker\u2019s client without either verifying the information or disclosing to the client that the information has not been verified.] <br class=\"avia-permanent-lb\" \/><br class=\"avia-permanent-lb\" \/><\/span><\/p>\n<hr \/>\n<div class=\"SS_Note\">\n<h2 class=\"SS_HideShowSection SS_Expandable\"><\/h2>\n<div id=\"TRNotes_n_1\">\n<p><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">New April 2008; Revised December 2012, June 2013, May 2020 <br class=\"avia-permanent-lb\" \/><br class=\"avia-permanent-lb\" \/><\/span><\/p>\n<hr \/>\n<p><a href=\"https:\/\/crowdsourcelawyers.com\/\">Crowdsource Lawyers<\/a><\/p>\n<p><a href=\"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\">https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci<\/a><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\"><br class=\"avia-permanent-lb\" \/><\/span><\/p>\n<hr \/>\n<\/div>\n<\/div>\n<div class=\"SS_Note\">\n<h2 class=\"SS_HideShowSection SS_Expandable\">Directions for Use<\/h2>\n<div id=\"TRNotes_n_2\">\n<p>This instruction may be read after\u00a0CACI No. 4101,\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Failure to Use Reasonable Care\u2014Essential Factual Elements,<\/span>\u00a0if a real estate broker\u2019s duty of disclosure to the broker\u2019s own client is at issue. Give the second paragraph if relevant to the facts of the case. For an instruction based on a broker\u2019s breach of duty to the buyer with regard to the property inspection required by\u00a0Civil Code section 2079, see\u00a0CACI No. 4108,\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Failure of Seller\u2019s Real Estate Broker to Conduct Reasonable Inspection\u2014Essential Factual Elements<\/span>.<\/p>\n<p>While a broker\u2019s fiduciary duty to the client arises from the relationship and not from contract (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">William L. Lyon &amp; Associates, Inc. v. Superior Court<\/span>\u00a0(2012) 204 Cal.App.4th 1294, 1312 [139 Cal.Rptr.3d 670]), the scope of the duty may be limited by contract. (See\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Carleton v. Tortosa<\/span>\u00a0(1993) 14 Cal.App.4th 745, 750\u2212751 [17 Cal.Rptr.2d 734]\u00a0[broker-client agreement may relieve broker of any duty to provide tax advice].) Any contractual limitations may be added to the second paragraph regarding what facts a broker must learn. <br class=\"avia-permanent-lb\" \/><br class=\"avia-permanent-lb\" \/><\/p>\n<hr \/>\n<\/div>\n<\/div>\n<div class=\"SS_Note\">\n<h2 class=\"SS_HideShowSection SS_Expandable\">Sources and Authority<\/h2>\n<div id=\"TRNotes_n_3\">\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cUnder the common law, \u2026 a broker\u2019s fiduciary duty to his client requires the highest good faith and undivided service and loyalty. \u2018The broker as a fiduciary has a duty to learn the material facts that may affect the principal\u2019s decision. He is hired for his professional knowledge and skill; he is expected to perform the necessary research and investigation in order to know those important matters that will affect the principal\u2019s decision, and he has a duty to counsel and advise the principal regarding the propriety and ramifications of the decision. The agent\u2019s duty to disclose material information to the principal includes the duty to disclose reasonably obtainable material information. [\u00b6] \u2026 [\u00b6] The facts that a broker must learn, and the advice and counsel required of the broker, depend on the facts of each transaction, the knowledge and the experience of the principal, the questions asked by the principal, and the nature of the property and the terms of sale. The broker must place himself in the position of the principal and ask himself the type of information required for the principal to make a well-informed decision. This obligation requires investigation of facts not known to the agent and disclosure of all material facts that might reasonably be discovered.\u2019\u2009\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Field v. Century 21 Klowden-Forness Realty<\/span>\u00a0(1998) 63 Cal.App.4th 18, 25\u201326 [73 Cal.Rptr.2d 784], internal citations omitted.)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cA fiduciary must tell its principal of all information it possesses that is material to the principal\u2019s interests. A fiduciary\u2019s failure to share material information with the principal is constructive fraud, a term of art obviating actual fraudulent intent. (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Michel v. Moore &amp; Associates, Inc.<\/span>\u00a0(2007) 156 Cal.App.4th 756, 762 [67 Cal.Rptr.3d 797], internal citations omitted.)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201c\u2009\u2018[W]here the seller knows of facts materially affecting the value or desirability of the property which are known or accessible only to him and also knows that such facts are not known to, or within the reach of the diligent attention and observation of the buyer, the seller is under a duty to disclose them to the buyer.\u2009\u2026\u2019 When the seller\u2019s real estate agent or broker is also aware of such facts, \u2018he [or she] is under the same duty of disclosure.\u2019\u2009\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Holmes v. Summer<\/span>\u00a0(2010) 188 Cal.App.4th 1510, 1518\u20131519 [116 Cal.Rptr.3d 419], internal citations omitted.)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201c\u2009\u2018A broker who is merely an innocent conduit of the seller\u2019s fraud may be innocent of actual fraud [citations], but in this situation the broker may be liable for negligence on a constructive fraud theory if he or she passes on the misstatements as true without personally investigating them.\u2019\u2009\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Salahutdin v. Valley of Cal.<\/span>\u00a0(1994) 24 Cal.App.4th 555, 562 [29 Cal.Rptr.2d 463].)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201c[T]he broker has a fiduciary duty to investigate the material facts of the transaction, and he cannot accept information received from others as being true, and transmit it to the principal, without either verifying the information or disclosing to the principal that the information has not been verified. Because of the fiduciary obligations of the broker, the principal has a right to rely on the statements of the broker, and if the information is transmitted by the broker without verification and without qualification, the broker is liable to the principal for negligent misrepresentation.\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Salahutdin, supra,<\/span>\u00a024 Cal.App.4th at pp. 562\u2013563.)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201c[T]he fiduciary duty owed by brokers to their own clients is substantially more extensive than the\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">nonfiduciary<\/span>\u00a0duty codified in [Civil Code] section 2079\u00a0[duty to visually inspect and disclose material facts].\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Michel, supra,<\/span>\u00a0156 Cal.App.4th at p. 763, original italics.)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cThe statutory duties owed by sellers\u2019 brokers under section 2079 are separate and independent of the duties owed by brokers to their own clients who are buyers.\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">William L. Lyon &amp; Associates, Inc. v. Superior Court<\/span>\u00a0(2012) 204 Cal.App.4th 1294, 1305 [139 Cal.Rptr.3d 670].)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201c[W]e are not persuaded by Defendants\u2019 reliance on\u00a0Civil 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\u2019s duties. \u2018Real estate brokers are subject to two sets of duties: those imposed by regulatory statutes, and those arising from the general law of agency.\u2019 Here, the [plaintiffs]\u2019 claims are not contingent on an expansion of the statutorily defined duties of a real estate broker. Instead, their claim is more elementary. If a real estate broker has information that will adversely affect the value of a property he or she is selling, does that broker have a duty to share that information with his or her client? The clear and uncontroversial answer to that question is yes.\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Ryan v. Real Estate of the Pacific, Inc.<\/span>\u00a0(2019) 32 Cal.App.5th 637, 646 [244 Cal.Rptr.3d 129], internal citation omitted.)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201c[Fiduciary] duties require full and complete disclosure of all material facts respecting the property or relating to the transaction in question.\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Padgett v. Phariss<\/span>\u00a0(1997) 54 Cal.App.4th 1270, 1286 [63 Cal.Rptr.2d 373].)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cReal estate brokers are subject to two sets of duties: those imposed by regulatory statutes, and those arising from the general law of agency.\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Coldwell Banker Residential Brokerage Co. v. Superior Court<\/span>\u00a0(2004) 117 Cal.App.4th 158, 164 [11 Cal.Rptr.3d 564].)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201c[R]eal estate brokers representing buyers of residential property are licensed professionals who owe fiduciary duties to their own clients. As such, this fiduciary duty is not a creature of contract and, therefore, did not arise under the buyer-broker agreement.\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">William L. Lyon &amp; Associates, Inc., supra<\/span>, 204 Cal.App.4th at p. 1312, internal citations omitted.) <br class=\"avia-permanent-lb\" \/><br class=\"avia-permanent-lb\" \/><\/span><\/p>\n<hr \/>\n<\/div>\n<\/div>\n<h2 class=\"SS_Heading\"><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\"><span class=\"SS_ib\" data-housestyle=\"EMPHASIS_ib\">Secondary Sources<\/span><\/span><\/h2>\n<div>5 Witkin, Summary of California Law (11th ed. 2017) Torts, \u00a7\u2009914<\/div>\n<div>Greenwald &amp; Asimow, California Practice Guide: Real Property Transactions, Ch. 2-C,\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Broker\u2019s Relationship And Obligations To Principal And Third Parties<\/span>, \u00b6\u20092:164 (The Rutter Group)<\/div>\n<div>California Real Property Sales Transactions (Cont.Ed.Bar 4th ed.) \u00a7\u00a7\u20092.132\u20132.136<\/div>\n<div>3\u00a0California Real Estate Law and Practice, Ch. 61,\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Employment and Authority of Brokers<\/span>, \u00a7\u200961.05,\u00a0Ch. 63,\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Duties and Liabilities of Brokers<\/span>, \u00a7\u00a7\u200963.20\u201363.22\u00a0(Matthew Bender)<\/div>\n<div>10\u00a0California Forms of Pleading and Practice, Ch. 103,\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Brokers<\/span>, \u00a7\u2009103.31\u00a0(Matthew Bender)<\/div>\n<div class=\"SS_Note\">\n<div id=\"TRNotes_n_3\"><\/div>\n<\/div>\n<\/div><\/section>\n<div  class='hr av-7e8nqt-7205dbfc308f56e6e5818650d12d01ed hr-default  avia-builder-el-6  el_after_av_textblock  el_before_av_textblock '><span class='hr-inner '><span class=\"hr-inner-style\"><\/span><\/span><\/div>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-5abgol-e1dfebb233d4fb1a8e5db83ae32ec979\">\n#top .av_textblock_section.av-5abgol-e1dfebb233d4fb1a8e5db83ae32ec979 .avia_textblock{\nfont-size:22px;\n}\n<\/style>\n<section  class='av_textblock_section av-5abgol-e1dfebb233d4fb1a8e5db83ae32ec979 '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock'  itemprop=\"text\" ><p><a href=\"https:\/\/crowdsourcelawyers.com\/\">CrowdSourceLawyers.com<\/a><\/p>\n<\/div><\/section>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":3,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-1877","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - 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