Agency Relationships

# Agency Relationships in California Real Estate ## The Agency Relationship Defined An agency is a legal relationship in which one person (the agent) is authorized to represent and act on behalf of another (the principal) in dealings with third parties. In real estate, the agent is the licensed salesperson or broker; the principal is the buyer or seller (or both, in dual agency) being represented. California's agency rules are codified primarily in Civil Code Sections 2079–2079.24 and the Business and Professions Code. Civil Code § 2079.13 (as amended by AB 2992, eff. January 1, 2025) supplies the core definitions: - Agent: "a person acting under provisions of Title 9 (commencing with Section 2295) in a real property transaction" - Dual agent: "an agent acting…as agent for both the seller and the buyer in a real property transaction" - Seller's agent: "a person who has obtained a listing of real property to act as an agent for compensation" - Buyer's agent: "an agent who represents a buyer in a real property transaction" - Real property transaction: applies to 1–4 residential dwelling units and condominiums/co-op units (§ 2079.13) A critical foundational rule: salespersons are not agents of the client. A salesperson is always an agent of their supervising broker. The broker is the agent of the client. The salesperson acts as a sub-agent of the broker and, through the broker, owes duties to the client. This means the broker is legally responsible for the salesperson's conduct — and BPC § 10177(h) expressly makes "failure to…