Laws of Agency, Disclosures, and Fair Housing

An agent owes the principal the fiduciary duties of Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care (OLD CAR).

Agency is typically created by an express agreement such as a written listing, and a written listing is required to enforce a commission claim in California.

Dual agency, representing both buyer and seller, is legal only with the informed written consent of both principals, and the dual agent may not disclose one party's confidential price limits to the other.

The Transfer Disclosure Statement (TDS) is required in sales of one-to-four residential units, requiring disclosure of known material facts about the property's condition.

The agency disclosure form must be provided and the agency relationship elected and confirmed before the principal signs the purchase agreement.

Sellers must provide a Natural Hazard Disclosure Statement and the statutory Megan's Law notice, and disclose known material facts affecting value or desirability.

Federal law requires disclosure of known lead-based paint hazards for housing built before 1978.

The federal Fair Housing Act protects race, color, religion, sex, national origin, disability, and familial status; California law adds classes such as marital status and source of income.

Steering, blockbusting, and redlining are prohibited discriminatory practices, and advertising may not express a preference based on protected classes.

The Unruh Civil Rights Act bars business establishments, including brokers, from arbitrary discrimination, and the Rumford Act prohibits housing discrimination.

Landlords must allow reasonable accommodations and modifications for tenants with disabilities, including service and assistance animals despite a no-pets policy.

The Department of Real Estate licenses and regulates salespersons and brokers under the Real Estate Law, headed by the Real Estate Commissioner.

A salesperson must be at least 18, complete required courses, pass the exam, and work under the supervision of a licensed broker.

The Commissioner may investigate complaints and suspend or revoke licenses, and price fixing among competing brokerages violates antitrust law.

Under Easton v. Strassburger and later statute, a listing agent must conduct a reasonably competent visual inspection of accessible areas and disclose material defects found.

Puffing, or exaggerated opinion, is generally not actionable, but false statements of material fact constitute misrepresentation.

A death on the property occurring more than three years before an offer generally need not be voluntarily disclosed, but the agent may not misrepresent it if directly asked.