Defining a Broker Duties in Visual Inspections – Cal. Civ. Code § 2079

If a real estate agent or broker has a written contract with a seller or is a broker who acts in cooperation with that broker to solicit buyers to purchase a 1-4 unit residential property, the real estate agent or broker is duty bound to conduct a reasonably competent and diligent visual inspection. And in turn, said agent is required to disclose all material facts that impact the value or desirability of the property such an investigation would reveal to any potential buyer. [See Cal. Civ. Code § 2079(a).] There are, however, some limitations regarding the extent of such an inspection. Under California law, the standard of care a broker owes to a prospective buyer is that which any prudent real estate broker or agent would exercise. And this standard is measured by their extent of knowledge gained through education and experience as reflected in the examination required to obtain a sales agent or broker’s license. [See Cal. Civ. Code § 2079.2.]

A selling agent or broker’s disclosure duties, however, do not relieve a buyer or prospective buyer of their duty to exercise reasonable care in protecting himself or herself. This includes uncovering and investigating facts that are known to or should be obvious a buyer or prospective buyer exercising attentive observation. [See Cal. Civ. Code § 2079.5.]

Of course, the scope of such an inspection is somewhat limited. It does not involve or include inspecting of areas that are reasonably and normally inaccessible in a general overview. Nor does this include an areas not physically part of the subject property,  or apply to public records or permits concerning the title or use of the property. See Cal. Civ. Code § 2079.3.

Additionally, prospective buyers should note that if they discover a breach or nondisclosure [of the duties outlined under Section 2079 et. seq.], they have two years from the date of taking possession, the date the property title was recorded in their name, the date of the close of escrow, or the date of occupancy, whichever happens first, in which to bring an action against the selling agent or broker. [See Cal. Civ. Code § 2079.4.] This statute does not impact the statute for intentional fraud, which runs for 3 years, or the statute for breach of fiduciary duty claims, which runs for 4 years.

Buyers should also be aware the rules regarding an agent’s duty to disclose defects visible to him or her during escrow don not diminish  the duty of disclosure agents owe to buyers for liability for their conduct with respect to these rules or for any breach of fiduciary responsibility or a seller’s legal duty of disclosure. [See Cal. Civ. Code § 2079.24.]