Understanding a Real Estate Agent’s Fiduciary Duties

Today, we kick off our series on a real estate professional’s fiduciary duties. Each real estate broker or salesperson acts as a fiduciary to their clients. But do all the parties really understand what this means. Over several weeks we will explore what those obligations look like and how they play out. Stay tuned.

As always, if you have any questions about your real estate, business, estate planning, or any other legal issue, please let us know by e-mailing Alex Munn at awmunn@bpelaw.com or managing shareholder Keith Dunnagan at kbdunnagan@bpelaw.com.

Also, remember that we do legal presentations for business and community organizations. If your group would like to schedule a presentation, please contact me to setup a date and time.

Understanding a Real Estate Agent’s Fiduciary Duties
By: D. Keith Dunnagan, Esq.

fiduciary dutyToday we kick off a multi-part series regarding a Real Estate Agent/Broker’s fiduciary duties to their clients. These laws are created both at the statutory level and/or regulatory level, ie. statutes enacted by the legislature or regulations created by the Department of Real Estate (DRE) as well as the common law. That is, decisions by the courts the impart duties upon the real estate professional.

At the most basic level the real estate professional’s “fiduciary duty to his client requires the highest good faith and undivided service and loyalty”. Field v. Century 21 Klowden-Forness Realty (1998). The core principle of the fiduciary duty is that fiduciary must put their client’s interest even above their own.

In addition to the statutory and common law duties, many real estate professionals are also subject to private standards and additional ethical obligations by virtue of joining a national or local association. Each entity may provide its own code of conduct imposed upon the real estate professionals.

Over the course of this multi-part series we will be examining various duties the real estate professional has including the duty to avoid conflicts of interest and dual agency; duty to not self-deal; duty to investigate and disclose; duty of honesty and reasonable care; and a Broker’s duty to supervise.

Each of these starts once the agency relationship is formed between the client and the broker. The key to understand is that while the agent/salesperson may be the individual that the client interfaces with and works with throughout the transaction. It is at the broker level that initial relationship is created. The reason for this is that an agent/salesperson from a legal standpoint does not have an independent duty to act. That salesperson/agent only has the authority to act through its relationship with the broker. Consequently, while the salesperson/agent most certainly has fiduciary duties to the client, those obligations are formed at the broker level.

Violations of these duties is the primary reason many agents find themselves exposed to liability. It is with that in mind that each agent/broker should be mindful of their obligations and operate with best practices in mind. In the next installment of this series we will begin to address conflicts of interest and dual agency in the framework of a real estate professionals fiduciary duty to their client.


The attorneys of BPE Law Group, PC. have been advising our clients on real estate, business and estate planning issues for over 20 years and have assisted numerous clients in business and real estate matters and have represented and advised brokers on their professional obligations as well as consumers on their rights. If you have questions concerning legal matters, give us a call at (916) 966-2260 or e-mail Keith at kbdunnagan@bpelaw.com. Our flat fee consult for new clients may get you the answers you need for the questions you have.

The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are facing a legal issue of any kind, get competent legal advice in your State immediately so that you can determine your best options.