Fiduciary Duties

# Fiduciary Duties — OLDCAR ## What Is a Fiduciary? A fiduciary is a person who holds a position of trust and must act in another's best interest. In California real estate, agents owe fiduciary duties to their principals — the highest standard of care recognized by law. California codifies disciplinary consequences for fiduciary breaches in Business and Professions Code §§ 10176 and 10177. Failing to meet fiduciary duties can result in license suspension, lawsuits, civil damages, and in serious cases, criminal charges. The six fiduciary duties owed to a principal are remembered with the acronym OLDCAR: - O — Obedience - L — Loyalty - D — Disclosure - C — Confidentiality - A — Accounting - R — Reasonable care and diligence --- ## O — Obedience The agent must follow all lawful instructions from the principal promptly and completely. The key word is *lawful* — an agent is not required to follow instructions that are illegal, unethical, or that violate fair housing law. Examples in California practice: - A seller instructs the listing agent to only accept offers from buyers with pre-approval letters from specific lenders. Lawful — follow it. - A seller instructs the agent not to show the home to buyers from a particular ethnic background. Unlawful — the agent must refuse and explain that fair housing law prohibits discrimination based on race, national origin, or other protected classes. - A seller says, "Don't bring me any offers under $1.4M." Lawful as a threshold instruction.…