Supreme Court Ruling in Horiike v. Coldwell Banker

The California Real Estate Legal Alliance (“CRELA”) recently posted the attached article entitled, "Supreme Court Ruling in Horiike v. Coldwell Banker." This case involves the issue of dual agency and agent disclosure duties.

The Effects of Trends in Real Estate on Legal Issues

There is no doubt that changes in the real estate market affect legal issues pertaining to real estate professionals.  This is evident when reviewing the changes in the real estate market during the last nine (9) years.


In 2007, the Great Recession hit the real estate market.  As a result, there were unprecedented increases in foreclosures and short sales due to losses of income and depreciation in the value of homes.  The situation was compounded by loans secured by real estate, for which borrowers did not qualify.  There were also questionable loan products with adjustable rates, creating a situation where borrowers could no longer afford their properties.  As a result, from 2007 to approximately 2011, the real estate industry dealt with short sales and the REO resale market.


In approximately 2010, the “flipper market” was born.  Due to low priced short sales and REO resales, investors began purchasing properties.  Those investors renovated and improved those properties and subsequently, placed them on the market.  Read more »

Concerns Pertaining to Drones

Agents are now using drones to take video and photographs for purposes of marketing properties.  However, the use of drones is creating potential liability for brokerages.

Liability relating to drones arises out of the following:

  1. Potential claims for invasion of privacy;
  1. Bodily injury or property damage affiliated with uncontrolled drones;
  1. Cyberliabilty and hacking issues; and
  1. Trespassing.

Invasion of privacy claims have been asserted based on property owners claiming that drones were intruding on their privacy and their property.  It is important that agents using drones ensure that they have a release of liability from their clients.  It is also important that agents ensure that drones are not intruding on neighbors’ properties.  Agents may want to consider using drones for rural properties, but not urban properties.

Claims have also arisen relating to bodily injury and property damage.  Operators of drones may lose control of the drones.  Issues have arisen that drones have hit people or property.  It is important that agents use reputable drone companies who are properly insured.

Issues have further arisen relating to cyberliability and hacking pertaining to drones.  Drones can be used to collect information and serve as mobile delivery services.  Drones are also used to collect substantive information, which could be used for software users seeking to steal data.  Such activities can create the theft of important information including trespass.
The use of drones could also be considered a trespass against neighboring properties.

Agents need to be cautious in their utilization of drones and selection of drone providers.


Warning About Internet Copyrighted Pictures

Pictures found on the internet are not necessarily free for agents to use.  Many are copyrighted and if agents use a copyrighted picture, they may be required to pay a fee for its usage.  Many of these pictures are of homes and neighborhoods that agents might wish to use in their marketing of properties, but be careful to verify whether the picture is copyrighted.

The main source of these pictures on the internet is Getty Images or Getty Rights Managed images.  They are not the only source of copyrighted pictures on the internet, but they have a very large database of these copyrighted pictures.  They are vigilant in checking to see who is using their copyrighted photos.  Very often, agents use these photos innocently and without knowledge that they are copyrighted, but that is not an excuse that will allow the agent to escape paying a fee for their usage. Read more »

Guidelines for Hiring Licensed or Unlicensed Assistants

It is important for a real estate agent to follow proper procedures when hiring licensed or unlicensed assistants.  First, there are two CAR forms that should be used when an agent decides to get an assistant.   There is the Personal Assistant Contract as well as the Broker/Associate-Licensee/Assistant Third Party Agreement.   It is suggested that both these forms be used.

In addition, CAR has an excellent Q & A entitled “Unlicensed Assistants” that lays out in chart form the activities that unlicensed assistants are legally permitted to do and those that are not permitted.   It is suggested that the agent hiring an unlicensed assistant provide the assistant with this form and have the assistant sign it on the last page indicating that they have received this and that they agree to abide by the guidelines set forth in it. Read more »

Advisory Regarding Service Animals and Emotional Support Animals

Agents should be very careful when asked whether a landlord will accept pets.  Both Federal and State law require a landlord to reasonably accommodate a tenant’s disability.  Disability is defined very broadly to include any mental or physical disorder or condition that makes it difficult to perform a major life activity.  If a tenant requests that the landlord permit a service animal or emotional support animal because it is necessary to accommodate the tenant’ disability, the owner would be required to allow the tenant to keep the animal in most situations. Read more »

Question and Answer Regarding Translation of Documents and Reports

Question:         If an agent reads and writes a foreign language, can that agent translate documents and reports in that language for their client?


Answer:           No.  If an agent translates documents and reports, it leaves open the possibility of a client claiming that the agent misinterpreted or misread the report.  For example, we had a case where an agent and the buyer spoke Spanish.  The agent read the inspection report to the client in Spanish.  The inspection report contained warnings regarding drainage issues.  The agent read those warnings to the buyer and the buyer accepted them.  The buyer later had drainage problems and sued the agent claiming that the agent failed to properly translate the warnings in the inspection report for the buyer.  If the agent had not translated that information, the agent could have used the defense that the buyer received and inspected the inspection report.  However, because there was a question about what was interpreted, we no longer had that defense available.

Team Names

The California Real Estate Legal Alliance (“CRELA”) recently posted the attached article entitled, “Summary of BRE regulations regarding Team Names and Fictitious Business Names.”