Legal Question in Real Estate Law in California

In California, does a broker need to disclose to the buyer he is doing a double escrow?

I purchased a property from a real estate broker, he was representing both the buyer (me) and seller. Came to find out later from the seller that he sold the property to the broker on the same day I purchased it from the broker. The broker paid less than what we paid. There's no problem with the fact he sold us the property for more than his purchase price, but i'm concerned he should have disclosed that this transaction was a double escrow. I can't find the California law on disclosure. Thank you.


Asked on 12/05/15, 10:24 am

1 Answer from Attorneys

There is no specific duty to disclose to you that he was doing a double escrow. However, it was completely illegal for him to represent you in a transaction in which he was the legal seller as between you and the buyer. It was also illegal to document the transaction as a sale from the seller to you if he owned the property even for five seconds before it was transferred to you. Without knowing his agreement with the seller, I can't say for sure if his transaction with the seller was illegal, but he absolutely breached his fiduciary duty to you by representing you in a transaction where he was legally the one selling to you, and in not disclosing to you that you could have bought the property directly from the seller at a lower price. As your broker he was absolutely legally obligated to get the house for you at the price he paid the seller. Failure to do so was a seriously dirty move, not to mention trying to dodge his obligations as seller by making it look like you were buying from the seller instead of from him. I would be MORE than happy to talk to you at one of my Sacramento area conference facilities about taking action against this broker. He should not be in business.

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Answered on 12/05/15, 2:32 pm


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