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Ely
Ely, Counselor at Law
Category: Real Estate Law
Satisfied Customers: 86338
Experience:  Qualified attorney in private practice including business, family, criminal, and real estate issues.
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I am a active real estate broker with my own firm. In 2011

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I am a active real estate broker with my own firm. In 2011 one of my real estate agents listed on the MLS here in California (2) city lots for the sum of $13,500. The lots were sold by an outside agency representing the buyers. 2 years later the buyers discovered they only have ownership of one of the lots. After reviewing the file, the offer that was submitted by their agent only described one address and APN number in the offer resulting in the closing of only one lot. Now the buyer is pointing fingers and the selling agency is pointing at us. Do we have an obiligation in this matter? Or just the selling agent??
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Ely replied 1 year ago.
Hello friend. My name is XXXXX XXXXX welcome to JustAnswer. Please note: (1) this is general information only, not legal advice, and, (2) there may be a slight delay between your follow ups and my replies.

I am very sorry for your situation.

Do we have an obiligation in this matter? Or just the selling agent??

I am afraid that you the firm may be liable here. It all depends on what your real estate agent KNEW or SHOULD HAVE KNOWN when they listed the lots for sale. Allow me to explain.

To sue in a state court, one needs to have a "cause of action." There are numerous causes of action, such as "breach of contract," "negligence," "fraud," "unjust enrichment," etc., as well as causes of action rooted in statutory law. Every state has their own although they are very similar to each other in every state.

Here, the buyers can allege - possibly - negligence. The elements of an action for negligence are the existence of duty (the obligation to other persons to conform to a standard of care to avoid unreasonable risk of harm to them); breach of duty (conduct below the standard of care); causation (between the defendant's act or omission and the plaintiffs injuries); and damages. Artiglio v. Corning Inc. (1998) 18 Cal.4th 604, 614, 76 Cal.Rptr.2d 479, 957 P.2d 1313.

They can allege here that your agent had a duty to know (or discover via reasonable search) that the listing had an issue, and that they failed to correct/mention that before the sale, thus making them liable. If they are the firm's employee (or a full-time contractor which basically acts as an employee), then the firm itself may be liable under the doctrine of Respondeat Superior. Under the doctrine of respondeat superior, an employer may be held vicariously liable for [wrongs] committed by an employee within the scope of employment. Perez v. Van Groningen & Sons, Inc. (1986) 41 Cal.3d 962, 967 [227 Cal. Rptr. 106, 719 P.2d 676]..

However, just because they claim that you are liable does not mean that you would be found as such. In the end, it is up to 12 jurors to decide who is (more) responsible, and they may decide that the selling agent had the upper duty to investigate any possibilities of error and omission in the listing before coming to (your) broker, and that your broker did not have to do a thorough check, or, only a "quick" check and not a thorough one. There is no statutory law that specifically states how an agent is liable in such a situation, so it is on a case by case basis.

In the end, the underlining question is: DID YOUR AGENT PERFORM DUE DILIGENCE? If so, then they are not responsible and by extent, neither are you. If not, then they may be held responsible, and if so, then the firm may be as well.

A firm in your situation may wish to then write back a letter stating that (1) the agent did its due diligence and thus (2) the firm is not liable and that one would defend one's self in any litigation. This may help to deter someone who is simply looking to scare you into payment with threat of litigation. Let me know if you need such a sample letter by using the REPLY button.

Please note: I aim to give you genuine information and not necessarily to tell you only what you wish to hear. Please, rate me on the quality of my information and do not punish me for my honesty. I understand that hearing things less than optimal is not easy, and I empathize.

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Customer: replied 1 year ago.

Just so I know I was clear on this.... Our listing was valid and described all real property for sale at the time. The other agent(not my firm) wrote an offer for the buyers and only wrote it up for one of the lots for sale where it eventually closed. So I have a duty still for the other agency actions ins regard of not writing the offer for 2 lots that were for sale but only one???


thank you

Expert:  Ely replied 1 year ago.
Friend,

Let us back up a bit. I first read your answer to understand that essentially, the buyers received deed(s) to a property in which one of the titles was not clear. I see now that this is not what had happened. Your agent advertised and described the property 100% correctly and it was sold 100% correctly. It was the other agent that wrote it up for only one of the lots, and all parties signed off on it.

As such, your agent did not do anything wrong, and hence, neither did your firm. All they did was follow what was signed to begin with. Also, California has a doctrine called the parol evidence rule - this is in itself your 'saving grace.' The parol evidence rule states that if there is a written agreement and a verbal agreement about the same thing, the written agreement controls. Whatever was stated verbally is seen as negotiation only. Bank of America etc. Assn. v. Pendergrass, 4 Cal. 2d 258 - Cal: Supreme Court 1935.

As such, the contract is final - it was written for one of the lots, everyone signed off on it, and the matter was done. Your agent is not liable in any way. So they are simply fishing here.

Again, let me know if you need a copy of a letter to write back. Apologies for the earlier miscommunication.

Gentle Reminder: Please use the REPLY button to keep chatting, or RATE and submit your rating when we are finished.
Customer: replied 1 year ago.


That's correct. Even though there is still an injuryed party here, the other firm wrote the offer for one lot. Our listing stated 2 lots and included BOTH apn numbers for reference in writing any offers which was missed or ignored by the other firms agent. This escrow was four months long and had plenty of time for discovery by the agent and buyers during escrow, signing of escrow papers, etc. Just wanted to make sure I had no obiligation of making the buyer aware of their agents mistake on the offer or something of that level or agrgument. I told the buyers sorry for your problem but you only offered to buy one lot. If it were the case they offered for two lots and only got delivered one lot that would be a different story all together. You got what you paid for is what were saying here?? Correct?? Even if value of the lot is less than consideration they paid? Just closing doors and loop holes here. Thank you


What is the fee for a letter??

Expert:  Ely replied 1 year ago.
Friend,

You got what you paid for is what were saying here?? Correct?? Even if value of the lot is less than consideration they paid?

Yup. They signed off on it - period. This is what they agreed to as far as the Court would be concerned.

What is the fee for a letter??

No fee! See below. Keep in mind this is just a sample, meant to inspire.

Dear ______________

This correspondence is in regards XXXXX XXXXX communique dated ____ in which you place blame on my agent in regards XXXXX XXXXX sale of (description of property, MLS #). This accusation is hereby denied.

Please note that my agent did all of their due diligence during performance of their duties and had made no error or omission in the listing of the property or during negotiation.

All parties had signed off on the firm offer of $___ for (description of property). It was the buyer's and the seller's decision - on paper - to agree to that lot only. Thus, this written agreement constitutes a binding and controlling contract - everything else was negotiation, which is common and not unusual in real estate sales. Only the written contract applies. Bank of America etc. Assn. v. Pendergrass, 4 Cal. 2d 258 - Cal: Supreme Court 1935.

As such, I now consider this matter closed. Please note that if any litigation is attempted, upon dismissal, my firm may pursue for malicious prosecution based on groundless litigation. Zamos v. Stroud, 87 P. 3d 802 - Cal: Supreme Court 2004. I would rather settle this amicably, however, and hope you agree.

Sincerely,

Signature

Name


Gentle Reminder: Please use the REPLY button to keep chatting, or RATE and submit your rating when we are finished.
Customer: replied 1 year ago.


The reasons of my concern were the first two sentences of the agency disclosure to both buyer and seller as a selling agent.


A. Diligent exercise of reasonable skill and care in performance of the agents duties


B. A duty of honest and fair dealing and good faith.


Just wanted to make sure these didn't apply in this situation or could be influxed some how. Thank you were almost done I think.

Expert:  Ely replied 1 year ago.
Friend,

They do apply. However, your agent arguably performed both of them perfectly. Again, the presumption is that whatever was written in contract is what the parties agreed-upon. Both parties agreed to this here. If the buyer made a mistake and signed off on something that they did not mean to - well - too bad for them, because they signed a binding contract and they should have read it over.

Unless your agent "switched" pages in the contract or otherwise engaged in deceit, they did nothing wrong. A somewhat good analogy is me buying an ice cream, paying for it, biting into it, and then telling the seller "hey wait, I ordered cherry, and not blueberry. I want to give this cherry ice cream back." I would be told - sorry, I agreed to it, i paid for it, I own it. I have to eat it.

Gentle Reminder: Please use the REPLY button to keep chatting, or RATE and submit your rating when we are finished.
Customer: replied 1 year ago.


I see.... those apply if my agent did something to cause the one lot purchase... but he didn't so he handled himself accordly. My file is nice and tight and clear on this one so I know there was no influence from my side to create the issue.

Expert:  Ely replied 1 year ago.
I believe I agree, and I think your agent (and thus your firm) escapes liability here.

Gentle Reminder: Please use the REPLY button to keep chatting, or RATE and submit your rating when we are finished.
Ely, Counselor at Law
Category: Real Estate Law
Satisfied Customers: 86338
Experience: Qualified attorney in private practice including business, family, criminal, and real estate issues.
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