New California Agency Disclosure Requirements for Commercial Agents and Brokers

Posted in: Real Estate Law by Dowling Aaron on

As of January 1, 2015, commercial real estate agents and brokers in California are required to comply with a more strict set of agency disclosure requirements. The effect of which imposes stringent agency disclosure requirements on commercial brokers (formerly applicable only to residential brokers) in connection with the sale (or lease exceeding one year) of commercial real estate.

Disclosure Regarding Real Estate Agency Relationship:

Listing and selling agents shall provide the seller and buyer in a real property transaction with a copy of the disclosure form specified in California Civil Code (“CCC”) Section 2079.16, and except as provided in section (c) below, shall obtain a signed acknowledgement of receipt from that seller or buyer as follows:

  1. The listing agent, if any, shall provide the disclosure form to the seller prior to entering into the listing agreement.
  2. 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 section (a) above.
  3. 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.
  4. 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.

Agency Confirmation:

As soon as practicable, the selling and listing agent shall disclose to the buyer and seller whether each are 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. 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 and/or listing agent prior to or coincident with the execution of that contract. A form of the confirmation required by this section is set forth in CCC Section 2079.17(c).

Other Requirements:

In addition to the disclosure requirements, the new statute requires that commercial real estate brokers acting as 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) and 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).

For further information, please contact Christopher A. Brown, Esq., at

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