Home Buying in Burlingame>Question Details

Liz, Home Buyer in Burlingame, CA

Can a sellers agent disclose details of a buyers offer to outside third parties without permission?

Asked by Liz, Burlingame, CA Sun Sep 5, 2010

Recently when renegotiating my rent my landlord informed me that they felt I could afford a rent increase because of the information they had received from an agent friend. The agent had represented a seller for a home I made an offer on. My offer was not successful. My landlord knew the down payment I was proposing and the offered consideration for the home. Does the agent's disclosure to my landlord represent an infringement of my legal rights? Is it just rude or is it an actual breach of ethics?

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Hi there.

Whether or not your offer is confidential, that is pretty upsetting. Your offer is not confidential unless you get them to sign a Non-Disclosure Agreement; however, I believe that the use of the that info is meant to allow the listing agent to negotiate the sale of the home rather than disclose the offer terms as a background check.

This seems borderline illegal to me and I would at least spend the time filing a formal complaint to the DRE. I'm not sure how that would work in terms of the laws regulating Landlords either. If the complaint doesn't work out, contact the local Board of Realtors and make your complaint there. After that, call some consumer watchdogs. To me, this is an abuse of power and extremely unethical.
Web Reference: http://www.atlistings.com
1 vote Thank Flag Link Mon Sep 6, 2010
Hi Liz. Wow, that's a twist I haven't heard yet. If what you're saying is 100% accurate, that's more than a slap in your face. Sounds like BAD business to me. Although each state has different real estate laws, I always think that "a closed mouth catches no flies" is the best behavior in our business. Your agent had no right giving that information to a 3rd party.

I'm sure that CA has a strong board of ethics. Why not call them and discuss what happened to see what your remedies are right away? You'll probably be able to file a written complaint, get a hearing, and change this person's behavior in the future.

Pretty slimy if you ask me.

GOOD LUCK.

Scott Miller, Realty Associates, Boca Raton, FL
1 vote Thank Flag Link Mon Sep 6, 2010
That agent had absolutely no right to share information about your finances with anyone without your expressed permission. That constitutes a violation of our code of ethics.

That said, as a tenant in California, you should be aware of your tenant rights and by how much your rent could be increased by your landlord. The increase is not based on your income or ability to pay, but how long you've been there, the terms of your lease,

Check this site on California Dept of Consumer Affairs concerning California tenants
http://www.dca.ca.gov/publications/landlordbook/living-in.shtml

Good luck
1 vote Thank Flag Link Sun Sep 5, 2010
If anything, it would strictly be an ethics issue and not a legal one.

Since the seller's agent does not have a relationship with you, it would be hard to make a case for breach of contract.

I'm not aware of any law that says a listing agent owes you a duty not to communicate your offer to a third party. However, in some circumstances, if he did say so intentionally to interfere with your lease with your landlord, then you may have a claim for intentional interference with contract claim coming. But this is rather unusual. In normal circumstances, this just doesn't happen.
0 votes Thank Flag Link Fri Jun 29, 2012
WOW. I would be furious! I agree with Matthew's advice.
0 votes Thank Flag Link Mon Sep 13, 2010
Liz:

Agree with Maureen:

When you write an offer, your agent should provide you with a disclosure (C.A.R. Form DA) that includes the following:

“NON CONFIDENTIALITY OF OFFERS: Buyer is advised that Seller or Listing Agent may disclose the existence, terms, or conditions of Buyer’s offer, unless all parties have signed a written confidentiality agreement.”

I’m assuming that you did not sign a confidentiality agreement that included a signature from the listing agent and seller(s) of the property on which you wrote an offer. It is not common practice in this area to use such an agreement.

Since the listing agent did not represent you and thereby did not have a fiduciary responsibility to you, by law they were free to discuss your offer and terms with anyone. There was no breech of ethics on behalf of the listing agent, nor was it rude. In fact, as Maureen pointed out, there may be an existing fiduciary relationship between the listing agent and your landlord which would make disclosure of such facts pertinent to their relationship.

If there is a complaint here, it could be against the landlord. Although a landlord has a legal right to be advised and informed of your complete financial status and capabilities, they should have already made their determination as to your ability to pay a specific monthly rent AND, in my opinion, be happy with the existing rent as negotiated for the term of any signed agreement or lease.

However, since it appears your lease is up, your landlord can decide, for ANY reason, to raise your rent. It is within their purview to use any information at their disposal and use any reason they deem applicable UNLESS there is rent control affecting this property. Since you have already demonstrated your desire to move out in the near future, this may be your landlord’s way of moving you out now so that he can get another long-term renter in your place. In my opinion, this is not unethical in any way.

Here is a website that may be helpful: http://www.californiare.net/Agency.htm

The following is copied from the above website:

“Beginning January 1, 2006, REALTORS® representing buyers have an ethical duty to advise their clients that sellers may not treat offers as confidential. More specifically, when entering into a buyer agreement, REALTORS® must advise potential clients of "the possibility that sellers or sellers' representatives may not treat the existence, terms, or conditions of offers as confidential unless confidentiality is required by law, regulation, or by any confidentiality agreement between the parties."

As a point of clarification, California law generally does not require the existence, terms, or conditions of offers to be kept confidential by either a seller or a listing agent representing the seller exclusively. However, parties may voluntarily enter into a confidentiality agreement.”
.
0 votes Thank Flag Link Mon Sep 13, 2010
I guess I have a question about the agent's fiduciary duty to you. I don't believe that there was any, unless you were his client at some point. I don't see that you were. He did no damage to his client by sharing the terms of your unsuccessful offer. I am not aware of any ethical or legal infringement, but I certainly would like to know more if there was one.

If the agent had a fiduciary duty to the landlord, then he might actually have had the duty to inform the landlord of your ability to pay more.
0 votes Thank Flag Link Tue Sep 7, 2010
Maureen Fran…, Real Estate Pro in Birmingham, MI
MVP'08
Contact
Hello Liz,

Realtors have a fiduciary duty. This agent, especially being a friend, should have never divulged your purchase contract information to a third party. Unfortunately, Burlingame is not a rent controlled city. Unless there was a written agreement in your lease that stated a cap on increased rent, you are doomed to pay the increase. My suggestion, talk to your realtors broker regarding the breach, go month to month and get a new realtor, that is not your friend (because it is hard to fire a friend) that will work diligently to get you a home and not discuss your personal information.

Unfortunately, situations like this one gives all realtors a bad name.

Sincerely,
Alan A. Canas
Cashin Company
1412 Chapin Avenue
Burlingame, Ca 94010
(650) 403-1222 - office
(650) 403-0308 - cell
(800) 493-1579 - fax
DRE# 001793936
http://www.canasrealty.com
http://www.peninsulabankowned.com
http://www.facebook.com/alancanas

"Your resource for all possibilities and remember... in real estate a team out performs an individual"
Web Reference: http://www.canasrealty.com
0 votes Thank Flag Link Tue Sep 7, 2010
Liz,

One of the primary precepts of a Realtor is fiduciary responsibility to your clients. If you know for sure that your agent disclosed this information it seems an inescapable breach of those ethics, but I don't think there is much you can do legally. An attorney could answer that.

The only recourse you have that I'm aware of is to file a complaint with their local MLS and/or the DRE California Department of Real Estate), but you will need proof for them to get punished. Whatever happens, doesn't sound like much of a friend.

Best Regards,

Lance King/Owner-Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425
0 votes Thank Flag Link Mon Sep 6, 2010
Liz although every states laws are different, i am not sur eit is illegal but is unethical. Your 2 choices are to file complaints with the CA real estate commission for violatins of law and a complaint with the Board of Realtors for the ethics complaints. You can always check with an attorney if you suffer any loss or suffering by their actions for a civi suit. Good luck with working things out
0 votes Thank Flag Link Mon Sep 6, 2010
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