REAL ESTATE FIDUCIARY I BREACH OF FIDUCIARY DUTY I REAL ESTATE FRAUD LAWYER I REAL ESTATE FRAUD CALIFORNIA I INVESTMENT FRAUD I INVESTMENT FRAUD LAWYER – Real Estate Brokerage and Agent Sued for Breach of Fiduciary and Investment Fraud
May 10, 2021
Real estate fiduciary breach occurs when a real estate agent places their own personal interest above that of their client. A real estate agent is someone who has a professional license to assist consumers in buying, selling or renting property and real estate. In this relationship the realtor is an agent representing their client in a real estate transaction. As such the client or consumer in this dynamic is the principal and is owed certain duties by the real estate agent.
One of the many fiduciary duties a realtor owes its principal is the duty of loyalty. The duty of loyalty is embodied in CACI 410 “Real Estate Fiduciary” in which “A Real Estate Agent owes what is known as a fiduciary duty to its client. A fiduciary duty imposes on an agent a duty to act with the utmost good faith in the best interests of its client” The fiduciary duty of loyalty is breached with the realtor agent places his/her personal interest above that of the principal.
A seller acting in her capacity as a trustee for her family trust, listed her investment property / rental property with a real estate brokerage firm. At this point a fiduciary relationship was established with the seller (principal) and the brokerage firm (agent). One of the individual agents at the brokerage firm offered to purchase the property. The seller and the agent entered into an installment contract material terms included a purchase price of $89,000, in which the agent would pay-off in monthly installment payments of $400 a month with a balloon payment after five years. During this time the seller would keep title to the property until the balloon payment was made. After the agent failed to make the monthly installment payments the, the seller filed an action against the agent and learned that the agent fraudulently obtained a warranty deed and fraudulently acquired title to the property. At trial a jury returned a verdict in favor of the seller in the amount of $170,280 which included: $75,000 in compensatory damages, $25,000 in punitive damages against the real estate agent, $15,000 in punitive damages against the brokerage firm, $1,107 in litigation costs, $46,970 in attorney fees and $7,203 in prejudgment interest.
In the underlying case the seller sued both the brokerage firm and the agent for breach of contract, fraud, negligent misrepresentation, unjust enrichment, breach of fiduciary duty and conversion. At trial the jury found that both the firm and the agent breached the fiduciary duty of care and fiduciary duty of loyalty owed to the seller.
For additional discussions on real estate fraud, investment fraud and/or real estate fiduciary duties please see the links below:
Relevant articles discussing Real Estate Fraud, Investment Fraud and Real Estate Fiduciary cases are included below:
Relevant articles discussing Damages for Real Estate Fraud, Investment Fraud and Real Estate Fiduciary breach are included below:
The statute of limitations in fraud and fiduciary cases are a concern and viable claims must be brought within the permitted statutory period. If you have fallen victim to real estate fraud, investment fraud or have questions regarding a potential real estate fiduciary breach case we encourage you to contact our offices at 619-432-5145 for a free consultation with one of our real estate fraud attorneys and investment fraud lawyers.