CIVIL CODE SECTION 2079-2079.24

 

2079.  (a) It is the duty of a real estate broker or salesperson,
licensed under Division 4 (commencing with Section 10000) of the
Business and Professions Code, to a prospective purchaser of
residential real property comprising one to four dwelling units, or a
manufactured home as defined in Section 18007 of the Health and
Safety Code, to conduct a reasonably competent and diligent visual
inspection of the property offered for sale and to disclose to that
prospective purchaser all facts materially affecting the value or
desirability of the property that an investigation would reveal, if
that broker has a written contract with the seller to find or obtain
a buyer or is a broker who acts in cooperation with that broker to
find and obtain a buyer.
   (b) It is the duty of a real estate broker or salesperson licensed
under Division 4 (commencing with Section 10000) of the Business and
Professions Code to comply with this section and any regulations
imposing standards of professional conduct adopted pursuant to
Section 10080 of the Business and Professions Code with reference to
Sections 10176 and 10177 of the Business and Professions Code.
 
2079.1.  The provisions of this article relating sale transactions
of residential real property comprising one to four dwelling units
apply with equal force to leases of that property that include an
option to purchase, ground leases of land on which one to four
dwelling units have been constructed, or real property sales
contracts, as defined in Section 2985, for that property.

2079.2.  The standard of care owed by a broker under this article is
the degree of care that a reasonably prudent real estate licensee
would exercise and is measured by the degree of knowledge through
education, experience, and examination, required to obtain a license
under Division 4 (commencing with Section 10000) of the Business and
Professions Code.

2079.3.  The inspection to be performed pursuant to this article
does not include or involve an inspection of areas that are
reasonably and normally inaccessible to such an inspection, nor an
affirmative inspection of areas off the site of the subject property
or public records or permits concerning the title or use of the
property, and, if the property comprises a unit in a planned
development as defined in Section 11003 of the Business and
Professions Code, a condominium as defined in Section 783, or a stock
cooperative as defined in Section 11003.2 of the Business and
Professions Code, does not include an inspection of more than the
unit offered for sale, if the seller or the broker complies with the
provisions of Section 1368.
  

2079.4.  In no event shall the time for commencement  of legal
action for breach of duty imposed by this article exceed two years
from the date of possession, which means the date of recordation, the
date of close of escrow, or the date of occupancy, whichever occurs
first.
  

2079.5.  Nothing in this article relieves a buyer or prospective
buyer of the duty to exercise reasonable care to protect himself or
herself, including those facts which are known to or within the
diligent attention and observation of the buyer or prospective buyer.
  

2079.6.  This article does not apply to transfers which are required
to be preceded by the furnishing, to a prospective transferee, of a
copy of a public report pursuant to Section 11018.1 of the Business
and Professions Code and transfers which can be made without a public
report pursuant to Section 11010.4 of the Business and Professions
Code, unless the property has been previously occupied.
 

2079.7.  (a) If a consumer information booklet described in Section
10084.1 of the Business and Professions Code is delivered to a
transferee in connection with the transfer of real property,
including property specified in Section 1102 of the Civil Code, or
manufactured housing, as defined in Section 18007 of the Health and
Safety Code, a seller or broker is  not required to provide
additional information concerning, and the information shall be
deemed to be adequate to inform the transferee regarding, common
environmental hazards, as described in the booklet, that can affect
real property.
   (b) Notwithstanding subdivision (a), nothing in this section
either increases or decreases the duties, if any, of sellers or
brokers, including but not limited to, the duties of a seller or
broker under this article, Article 1.5 (commencing with Section 1102)
of Chapter 2 of Title 4 of Part 4 of Division  2, or Section 25359.7
of the Health and Safety Code, or alters the duty of a seller or
broker to disclose the existence of known environmental hazards on or
affecting the real property.
  

2079.8.  (a) If a Homeowner's Guide to Earthquake Safety described
in Section 10149 of the Business and Professions Code is delivered to
a transferee in connection with the transfer of real property,
including property specified in Section 1102 or under Chapter 7.5
(commencing with Section 2621) of Division 2 of the Public Resources
Code, a seller or broker is not required to provide additional
information concerning, and the information shall be deemed to be
adequate to inform the transferee regarding, geologic and seismic
hazards, in general, as described in  the guide, that may affect real
property and mitigating measures that the transferee or seller might
consider.
   (b) Notwithstanding subdivision (a), nothing in this section
increases or decreases the duties, if any, of sellers or brokers,
including, but not limited to, the duties of a seller or broker under
this article, Article 1.5 (commencing with Section 1102) of Chapter
2 of Title 4 of Part 4 of Division 2, or under Chapter 7.5
(commencing with Section 2621) of Division 2 of the Public Resources
Code, or alters the duty of a seller or broker to disclose the
existence of known hazards on or affecting the real property.
  

2079.9.  (a) If a Commercial Property Owner's Guide to Earthquake
Safety described in Section 10147 of the Business and Professions
Code is delivered to a transferee in connection with the transfer of
real property, including property specified in Section 1102 or under
Chapter 7.5 (commencing with Section 2621) of Division 2 of the
Public Resources Code, a seller or broker is not required to provide
additional information concerning, and the information shall be
deemed to be adequate to inform the transferee regarding, geologic
and seismic hazards, in general, as described in the guide, that may
affect real property and mitigating measures that the transferee or
seller might consider.
   (b) Notwithstanding subdivision (a), nothing in this section
increases or decreases the duties, if any, of sellers, their brokers
or agents under this article or under Chapter 7.5 (commencing with
Section 2621) or Chapter 7.8 (commencing with Section 2690) of
Division 2 of the Public Resources Code, or alters the duty of a
seller, agent, or broker to disclose the existence of known hazards
on or affecting the real property.
  

2079.10.  (a) If the informational booklet published pursuant to
Section 25402.9 of the Public Resources Code, concerning the
statewide home energy rating program adopted pursuant to Section
25942 of the Public Resources Code, is delivered to a transferee in
connection with the transfer of real property, including, but not
limited to, property specified in Section 1102, manufactured homes as
defined in Section 18007 of the Health and Safety Code, and property
subject to Chapter 7.5 (commencing with Section 2621) of Division 2
of the Public Resources Code, the seller or broker is not required to
provide information additional to that contained in the booklet
concerning home energy ratings, and the information in the booklet
shall be deemed to be adequate to inform the transferee about the
existence of a statewide home energy rating program.
   (b) Notwithstanding subdivision (a), nothing in this section
alters any existing duty of the seller or broker under any other law
including, but not limited to, the duties of a seller or broker under
this article, Article 1.5 (commencing with Section 1102) of Chapter
2 of Title 4 of Part 4 of Division 2 of the Civil Code, or Chapter
7.5 (commencing with Section 2621) of Division 2 of the Public
Resources Code, to disclose information concerning the existence of a
home energy rating program affecting the real property.
 

2079.10a.  (a) Every lease or rental agreement for residential real
property and every contract for sale of residential real property
comprising one to four dwelling units, shall contain, in not less
than eight-point type, the following notice:
 

   Notice:  The California Department of Justice, sheriff's
departments, police departments serving jurisdictions of 200,000 or
more and many other local law enforcement authorities maintain for
public access a data base of the locations of persons required to
register pursuant to paragraph (1) of subdivision (a) of Section
290.4 of the Penal Code.  The data base is updated on a quarterly
basis and a source of information about the presence of these
individuals in any neighborhood.  The Department of Justice also
maintains a Sex Offender Identification Line through which inquiries
about individuals may be made.  This is a "900" telephone service.
Callers must have specific information about individuals they are
checking.  Information regarding neighborhoods is not available
through the "900" telephone service.
 

   (b) Subject to subdivision (c), upon delivery of the notice to the
lessee or transferee of the real property, the lessor, seller, or
broker is not required to provide information in addition to that
contained in the notice regarding the proximity of registered sex
offenders.  The information in the notice shall be deemed to be
adequate to inform the lessee or transferee about the existence of a
statewide data base of the locations of registered sex offenders and
information from the data base regarding those locations.  The
information in the notice shall not give rise to any cause of action
against the disclosing party by a registered sex offender.
   (c) Notwithstanding subdivisions (a) and (b), nothing in this
section shall alter any existing duty of the lessor, seller, or
broker under any other statute or decisional law including, but not
limited to, the duties of a lessor, seller, or broker under this
article, or the duties a seller or broker under Article 1.5
(commencing with Section 1102) or Chapter 2 of Title 4 of Part 4 of
Division 2.
   (d) Subdivision (a) of this section shall apply only to written
agreements and contracts that are entered into by the parties on or
after July 1, 1999.
  

2079.11.  (a) Except as provided in subdivision (b), to the extent
permitted by law, the consumer information publications referred to
in this article, including, but not limited to, the information
booklets described in Section 10084.1 of the Business and Professions
Code and Section 25402.9 of the Public Resources Code, shall be in
the public domain and freely available.
   (b) Notwithstanding subdivision (a), the Seismic Safety Commission'
s Homeowner's Guide to Earthquake Safety, published pursuant to
Section 10149 of the Business and Professions Code, shall be made
available to the public at cost and for reproduction at no cost to
any vendor who wishes to publish the guide, provided the vendor
agrees to submit the guide to the commission prior to publication for
content approval.
 
2079.12.  (a) The Legislature hereby finds and declares all of the
following:
   (1) That the imprecision of terms in the opinion rendered in
Easton v.  Strassburger, 152 Cal. App. 3d 90, and the absence of a
comprehensive declaration of duties, standards, and exceptions, has
caused insurers to modify professional liability coverage of real
estate licensees and has caused confusion among real estate licensees
as to the manner of performing the duty ascribed to them by the
court.
   (2) That it is necessary to resolve and make precise these issues
in an expeditious manner.
   (3) That it is desirable to facilitate the issuance of
professional liability insurance as a resource for aggrieved members
of the public.
   (4) That Sections 2079 to 2079.6, inclusive, of this article
should be construed as a definition of the duty of care found to
exist by the holding of Easton v. Strassburger, 152 Cal. App. 3d 90,
and the manner of its discharge, and  is declarative of the common
law regarding this duty.  However, nothing in this section is
intended to affect the court's ability to interpret Sections 2079 to
2079.6, inclusive.
   (b) It is the intent of the Legislature to codify and make precise
the holding of Easton v. Strassburger, 152 Cal. App. 3d 90.  It is
not the intent of the Legislature to modify or restrict existing
duties owed by real estate licensees.
 

2079.13.  As used in Sections 2079.14 to 2079.24, inclusive, the
following terms have the following meanings:
   (a) "Agent" means a person acting under provisions of Title 9
(commencing with Section 2295) in a real property transaction, and
includes a person who is licensed as a real estate broker under
Chapter 3 (commencing with Section 10130) of Part 1 of Division 4 of
the Business and Professions Code, and under whose license a listing
is executed or an offer to purchase is obtained.
   (b) "Associate licensee" means a person who is licensed as a real
estate broker or salesperson under Chapter 3 (commencing with Section
10130) of Part 1 of Division 4 of the Business and Professions Code
and who is either licensed under a broker or has entered into a
written contract with a broker to act as the broker's agent in
connection with acts requiring a real estate license and to function
under the broker's supervision in the capacity of an associate
licensee.
   The agent in the real property transaction bears responsibility
for his or her associate licensees who perform as agents of the
agent.  When an associate licensee owes a duty to any principal, or
to any buyer or seller who is not a principal, in a real property
transaction, that duty is equivalent to the duty owed to that party
by the broker for whom the associate licensee functions.
   (c) "Buyer" means a transferee in a real property transaction, and
includes a person who executes an offer to purchase real property
from a seller through an agent, or who seeks the services of an agent
in more than a casual, transitory, or preliminary manner, with the
object of entering into a real property transaction.  "Buyer"
includes vendee or lessee.
   (d) "Dual agent" means an agent acting, either directly or through
an associate licensee, as agent for both the seller and the buyer in
a real property transaction.
   (e) "Listing agreement" means a contract between an owner of real
property and an agent, by which the agent has been authorized to sell
the real property or to find or obtain a buyer.
   (f) "Listing agent" means a person who has obtained a listing of
real property to act as an agent for compensation.
   (g) "Listing price" is the amount expressed in dollars specified
in the listing for which the seller is willing to sell the real
property through the listing agent.
   (h) "Offering price" is the amount expressed in dollars specified
in an offer to purchase for which the buyer is willing to buy the
real property.
   (i) "Offer to purchase" means a written contract executed by a
buyer acting through a selling agent which becomes the contract for
the sale of the real property upon acceptance by the seller.
   (j) "Real property" means any estate specified by subdivision (1)
or (2) of Section 761 in property which constitutes or is improved
with one to four dwelling units, any leasehold in this type of
property exceeding one year's duration, and mobilehomes, when offered
for sale or sold through an agent pursuant to the authority
contained in Section 10131.6 of the Business and Professions Code.
   (k) "Real property transaction" means a transaction for the sale
of real property in which an agent is employed by one or more of the
principals to act in that transaction, and includes a listing or an
offer to purchase.
   (l) "Sell," "sale," or "sold" refers to a transaction for the
transfer of real property from the seller to the buyer, and includes
exchanges of real property between the seller and buyer, transactions
for the creation of a real property sales contract within the
meaning of Section 2985, and transactions for the creation of a
leasehold exceeding one year's duration.
   (m) "Seller" means the transferor in a real property transaction,
and includes an owner who lists real property with an agent, whether
or not a transfer results, or who receives an offer to purchase real
property of which he or she is the owner from an agent on behalf of
another.  "Seller" includes both a vendor and a lessor.
   (n) "Selling agent" means a listing agent who acts alone, or an
agent who acts in cooperation with a listing agent, and who sells or
finds and obtains a buyer for the real property, or an agent who
locates property for a buyer or who finds a buyer for a property for
which no listing exists and presents an offer to purchase to the
seller.
   (o) "Subagent" means a person to whom an agent delegates agency
powers as provided in Article 5 (commencing with Section 2349) of
Chapter 1 of Title 9.  However, "subagent" does not include an
associate licensee who is acting under the supervision of an agent in
a real property transaction.
  

2079.14.  Listing agents and selling agents shall provide the seller
and buyer in a real property transaction with a copy of the
disclosure form specified in Section 2079.16, and, except as provided
in subdivision (c), shall obtain a signed acknowledgment of receipt
from that seller or buyer, except as provided in this section or
Section 2079.15, as follows:
   (a) The listing agent, if any, shall provide the disclosure form
to the seller prior to entering into the listing agreement.
   (b) The selling agent shall provide the disclosure form to the
seller as soon as practicable prior to presenting the seller with an
offer to purchase, unless the selling agent previously provided the
seller with a copy of the disclosure form pursuant to subdivision
(a).
   (c) Where the selling agent does not deal on a face-to-face basis
with the seller, the disclosure form prepared by the selling agent
may be furnished to the seller (and acknowledgment of receipt
obtained for the selling agent from the seller) by the listing agent,
or the selling agent may deliver the disclosure form by certified
mail addressed to the seller at his or her last known address, in
which case no signed acknowledgment of receipt is required.
   (d) The selling agent shall provide the disclosure form to the
buyer as soon as practicable prior to execution of the buyer's offer
to purchase, except that if the offer to purchase is not prepared by
the selling agent, the selling agent shall present the disclosure
form to the buyer not later than the next business day after the
selling agent receives the offer to purchase from the buyer.
 

2079.15.  In any circumstance in which the seller or buyer refuses
to sign an acknowledgment of receipt pursuant to Section 2079.14, the
agent, or an associate licensee acting for an agent, shall set
forth, sign, and date a written declaration of the facts of the
refusal.
  

2079.16.  The disclosure form required by Section 2079.14 shall have
Sections 2079.13 to 2079.24, inclusive, excluding this section,
printed on the back, and on the front of the disclosure form the
following shall appear:
      DISCLOSURE REGARDING
REAL ESTATE AGENCY RELATIONSHIP
(As required by the Civil Code)
 

   When you enter into a discussion with a real estate agent
regarding a real estate transaction, you should from the outset
understand what type of agency relationship or representation you
wish to have with the agent in the transaction.
      SELLER'S AGENT
 

   A Seller's agent under a listing agreement with the Seller acts as
the agent for the Seller only.  A Seller's agent or a subagent of
that agent has the following affirmative obligations:
To the Seller:
   A fiduciary duty of utmost care, integrity, honesty, and loyalty
in dealings with the Seller.
To the Buyer and the Seller:
   (a) Diligent exercise of reasonable skill and care in performance
of the agent's duties.
   (b) A duty of honest and fair dealing and good faith.
   (c) A duty to disclose all facts known to the agent materially
affecting the value or desirability of the property that are not
known to, or within the diligent attention and observation of, the
parties.
   An agent is not obligated to reveal to either party any
confidential information obtained from the other party that does not
involve the affirmative duties set forth above.
      BUYER'S AGENT
 

   A selling agent can, with a Buyer's consent, agree to act as agent
for the Buyer only.  In these situations, the agent is not the
Seller's agent, even if by agreement the agent may receive
compensation for services rendered, either in full or in part from
the Seller.  An agent acting only for a Buyer has the following
affirmative obligations:
To the Buyer:
   A fiduciary duty of utmost care, integrity, honesty, and loyalty
in dealings with the Buyer.
To the Buyer and the Seller:
   (a) Diligent exercise of reasonable skill and care in performance
of the agent's duties.
   (b) A duty of honest and fair dealing and good faith.
   (c) A duty to disclose all facts known to the agent materially
affecting the value or desirability of the property that are not
known to, or within the diligent attention and observation of, the
parties.  An agent is not obligated to reveal to either party any
confidential information obtained from the other party that does not
involve the affirmative duties set forth above.
      AGENT REPRESENTING BOTH SELLER AND BUYER
 

   A real estate agent, either acting directly or through one or more
associate licensees, can legally be the agent of both the Seller and
the Buyer in a transaction, but only with the knowledge and consent
of both the Seller and the Buyer.
   In a dual agency situation, the agent has the following
affirmative obligations to both the Seller and the Buyer:
   (a) A fiduciary duty of utmost care, integrity, honesty and
loyalty in the dealings with either the Seller or the Buyer.
   (b) Other duties to the Seller and the Buyer as stated above in
their respective sections.
   In representing both Seller and Buyer, the agent may not, without
the express permission of the respective party, disclose to the other
party that the Seller will accept a price less than the listing
price or that the Buyer will pay a price greater than the price
offered.
   The above duties of the agent in a real estate transaction do not
relieve a Seller or Buyer from the responsibility to protect his or
her own interests.  You should carefully read all agreements to
assure that they adequately express your understanding of the
transaction.  A real estate agent is a person qualified to advise
about real estate.  If legal or tax advice is desired, consult a
competent professional.
   Throughout your real property transaction you may receive more
than one disclosure form, depending upon the number of agents
assisting in the transaction.  The law requires each agent with whom
you have more than a casual relationship to present you with this
disclosure form.  You should read its contents each time it is
presented to you, considering the relationship between you and the
real estate agent in your specific transaction.
   This disclosure form includes the provisions of  Sections 2079.13
to 2079.24, inclusive, of the Civil Code set forth on the reverse
hereof.  Read it carefully.
 

 

  _______________________________    ___________________________
           Agent   (date)                    Buyer/Seller    (date)
                                     (Signature)
  _______________________________    ___________________________
   Associate Licensee  (date)        Buyer/Seller    (date)
   (Signature)                       (Signature)
  

2079.17.  (a) As soon as practicable, the selling agent shall
disclose to the buyer and seller whether the selling agent is acting
in the real property transaction exclusively as the buyer's agent,
exclusively as the seller's agent, or as a dual agent representing
both the buyer and the seller.  This relationship shall be confirmed
in the contract to purchase and sell real property or in a separate
writing executed or acknowledged by the seller, the buyer, and the
selling agent prior to or coincident with execution of that contract
by the buyer and the seller, respectively.
   (b) As soon as practicable, the listing agent shall disclose to
the seller whether the listing agent is acting in the real property
transaction exclusively as the seller's agent, or as a dual agent
representing both the buyer and seller.  This relationship shall be
confirmed in the contract to purchase and sell real property or in a
separate writing executed or acknowledged by the seller and the
listing agent prior to or coincident with the execution of that
contract by the seller.
   (c) The confirmation required by subdivisions (a) and (b) shall be
in the following form:
 

 

     _____________________________ is the agent of (check one):
        (Name of Listing Agent)
     ( )  the seller exclusively; or
     ( )  both the buyer and seller.
 

__________________________________________________________________
        (Name of Selling Agent if not the same as the Listing Agent)
     is the agent of (check one):
     ( )  the buyer exclusively; or
     ( )  the seller exclusively; or
     ( )  both the buyer and seller.
 

   (d) The disclosures and confirmation required by this section
shall be in addition to the disclosure required by Section 2079.14.
 

 

 

 

2079.18.  No selling agent in a real property transaction may act as
an agent for the buyer only, when the selling agent is also acting
as the listing agent in the transaction.
 

 

 

2079.19.  The payment of compensation or the obligation to pay
compensation to an agent by the seller or buyer is not necessarily
determinative of a particular agency relationship between an agent
and the seller or buyer.  A listing agent and a selling agent may
agree to share any compensation or commission paid, or any right to
any compensation or commission for which an obligation arises as the
result of a real estate transaction, and the terms of any such
agreement shall not necessarily be determinative of a particular
relationship.
 

 

2079.20.  Nothing in this article prevents an agent from selecting,
as a condition of the agent's employment, a specific form of agency
relationship not specifically prohibited by this article if the
requirements of Section 2079.14 and Section 2079.17 are complied
with.
 
2079.21.  A dual agent shall not disclose to the buyer that the
seller is willing to sell the property at a price less than the
listing price, without the express written consent of the seller.  A
dual agent shall not disclose to the seller that the buyer is willing
to pay a price greater than the offering price, without the express
written consent of the buyer.
   This section does not alter in any way the duty or responsibility
of a dual agent to any principal with respect to confidential
information other than price.
  

2079.22.  Nothing in this article precludes a listing agent from
also being a selling agent, and the combination of these functions in
one agent does not, of itself, make that agent a dual agent.
  

2079.23.  A contract between the principal and agent may be modified
or altered to change the agency relationship at any time before the
performance of the act which is the object of the agency with the
written consent of the parties to the agency relationship.
  

2079.24.  Nothing in this article shall be construed to either
diminish the duty of disclosure owed buyers and sellers by agents and
their associate licensees, subagents, and employees or to relieve
agents and their associate licensees, subagents, and employees from
liability for their conduct in connection with acts governed by this
article or for any breach of a fiduciary duty or a duty of
disclosure.