Agent Veracity Under Civil Code Section 1088

As a real estate broker, it's crucial to stay informed about the legal landscape that governs your profession. One key piece of legislation that directly impacts your operations is California Civil Code Section 1088. This section addresses the responsibilities and obligations of brokers when it comes to listing properties and ensuring the accuracy of the information provided.

In general, “California cases recognize a fundamental duty on the part of a realtor to deal honestly and fairly with all parties in the sale transaction.” (Holmes v. Summer (2010) 188 Cal.App.4th 1510, 1523)[internal citations omitted].) This also includes “. . . a duty to disclose matters that do not pertain to physical defects, but otherwise affect the desirability of the purchase. (See, e.g., Alexander v. McKnight (1992) 7 Cal.App.4th 973 [duty to disclose neighborhood nuisance]; Reed v. King (1983) 145 Cal.App.3d 261 [duty to disclose murders on the property]; Lingsch v. Savage, supra, 213 Cal.App.2d at p. 737 [duty to disclose that improvements were constructed in violation of building codes or zoning regulations].) They have also been held to have a duty to disclose conditions to close of escrow. (Wilson v. Lewis, supra, 106 Cal.App.3d at pp. 807–809, 165 Cal.Rptr. 396 [duty to disclose conditions re inspection and date of deposit].)”  (Id. at 1520.)

A broker's duties with respect to any listing or other information posted to a Multiple Listing Service (MLS) are specified in section 1088. 

What is Civil Code Section 1088?

Civil Code Section 1088 mandates that a real estate broker must ensure the accuracy of all information provided in property listings. This includes, but is not limited to, details about the property’s size, features, price, and any other material facts that could influence a potential buyer's decision. The code is designed to maintain transparency and honesty in real estate transactions, protecting both buyers and sellers from misinformation. But note that broker liability under section 1088 requires either that the broker knew or should have known that the information was false or inaccurate (see e.g., https://www.justia.com/trials-litigation/docs/caci/4100/4110/.)

“On the other hand, a buyer is not relieved of “the duty to exercise reasonable care to protect himself or herself, including those facts [sic] which are known to or within the diligent attention and observation of the buyer”; and a buyer is held to be aware of obvious and patent conditions.” (Furla v. Jon Douglas Co. (1998) 65 Cal.App.4th 1069, 1079.)

Key Responsibilities Under Section 1088

1. Accuracy of Listings: Brokers are required to verify the accuracy of all information before it is published. This means double-checking details with property owners and ensuring all data is up-to-date and correct.

2. Updates and Corrections: If any information about a listed property changes, brokers must update the listing promptly. This includes changes in price, property status, or any other significant detail.

3. Disclosure of Material Facts: Brokers must disclose all material facts about a property. A material fact is any information that could affect a buyer’s decision to purchase the property. Failure to disclose such information can lead to legal repercussions.

4. Responsibility for Truthfulness: According to subsection (b) of Civil Code Section 1088: "If an agent or appraiser places a listing or other information in the multiple listing service, that agent or appraiser shall be responsible for the truth of all representations and statements made by the agent or appraiser of which that agent or appraiser had knowledge or reasonably should have had knowledge to anyone injured by their falseness or inaccuracy."

Why Compliance Matters

Compliance with Civil Code Section 1088 is not just a legal obligation but a best practice for maintaining trust and credibility in the real estate market. Here’s why it matters:

• Protecting Your Clients: Accurate information helps clients make informed decisions, protecting them from potential losses or disputes.

• Avoiding Legal Issues: Non-compliance can lead to lawsuits, fines, and a damaged reputation. Ensuring accuracy and transparency can save brokers from costly legal battles.

• Building Trust: Honest and transparent dealings build long-term relationships with clients, leading to repeat business and referrals.

Practical Steps for Brokers

• Regular Training: Keep yourself and your team updated on the latest legal requirements and best practices in listing accuracy.

• Verification Processes: Implement rigorous verification processes for all property listings. This includes cross-checking information with multiple sources.

• Prompt Updates: Develop a system for prompt updates to listings whenever there are changes in property information.

• Clear Communication: Maintain clear and open communication with property owners and buyers to ensure all parties have accurate and complete information.

Civil Code Section 1088 is a critical regulation for real estate brokers in California, emphasizing the importance of accuracy and transparency in property listings. By adhering to this code, brokers not only comply with the law but also enhance their professional integrity and client trust. Stay informed, stay compliant, and continue to provide exceptional service to your clients.

For further advice and assistance on compliance with Civil Code Section 1088 or any other real estate legal matters, feel free to contact our office. We are here to help you navigate the complexities of real estate law and ensure your success.

This article is intended to provide a general overview of Civil Code Section 1088 and should not be construed as legal advice. For specific legal concerns, please consult with a qualified attorney.