Agency, Contracts, and Transfer of Property
Agency
Duties and how agency arises
The fiduciary duties - obedience, loyalty, disclosure, confidentiality, accounting, reasonable care - run to the client. Agency is created expressly, by implication from conduct, or by ostensible agency when the principal's words or actions lead a third party to believe the relationship exists. Compensation does not create agency; a broker paid by the seller can still be the buyer's agent if the relationship is documented that way.
The disclosure forms
The Disclosure Regarding Real Estate Agency Relationship must be provided before the buyer or seller signs anything and is confirmed again in the purchase agreement. Learn three patterns: single agency (one client), dual agency (both sides, with informed written consent of both), and designated agency (the broker assigns different salespersons to each side so neither is conflicted).
Duties that survive
Confidentiality outlives termination. A listing agent who learns the seller would accept $50,000 less must never tell the buyer, even after the listing expires. But honesty and fair dealing toward third parties mean physical defects and material facts must be disclosed to everyone.
Traps: a dual agent may not advocate for one side over the other; designated agency is not dual agency; loyalty to a seller never licenses misdescribing the property to a buyer.
Rule of thumb: confidential information about your client stays silent; material facts about the property get spoken.
Contracts and Transfer of Property
Contract essentials
Offer, acceptance, consideration, capacity, lawful object, and mutual consent - plus a writing signed by the party to be charged (statute of frauds). Exclusive listings must be written, signed by the owner, and contain a definite termination date; an oral exclusive listing is unenforceable.
An option is a unilateral contract: the optionee holds the power to perform, the optionor cannot revoke during the option period, and the option needs consideration. A right of first refusal is different - it gives a matching right, not the power to compel a sale.
Remedies and terms
Contingencies (inspection, appraisal, loan) must be affirmatively removed. A liquidated damages clause must be a reasonable estimate of loss. Assignment transfers rights and duties; novation substitutes a new party and extinguishes the old obligation.
Deeds and title
Grant deed - implies the grantor has not previously conveyed the property and it is free of undisclosed encumbrances. Quitclaim - no warranty at all. Trustee's deed conveys after foreclosure. Recording gives constructive notice and sets priority under race-notice rules. Title insurance runs from CLTA standard coverage to ALTA extended, which adds off-record risks.
Traps: a quitclaim deed guarantees nothing; joint tenancy carries survivorship, tenancy in common does not; adverse possession in California generally needs five years of open, hostile, actual, exclusive, continuous use plus payment of taxes.