Mariwyn Evans writes about commercial real estate for REALTOR® Magazine. You can reach her at firstname.lastname@example.org.
Brokerage Can Represent Competing Buyers
In Rivkin v. Century 21 Teran Realty LLC, the court ruled that a brokerage can legally serve two competing buyers.
November 1, 2008
The Court of Appeals of New York has ruled that a brokerage did not violate its fiduciary duties to the buyer-client of one of its salespeople by permitting another salesperson at the brokerage to represent a competing buyer for a property.
In the case (Rivkin v. Century 21 Teran Realty LLC, 2008), potential buyer Oleg Rivkin instructed a salesperson to make a below-list offer on a vacation home the salesperson had shown him. He also signed the buyer agency disclosure form required by the state.
Two days later, another couple also made an offer on the property through a second associate at the brokerage, this time at full list price. The property owners accepted the full price offer and did not give Rivkin the opportunity to make a counteroffer. After the salesperson told Rivkin that his offer had not been accepted, Rivkin personally called the property owners and offered a higher price. However, the owners decided not to cancel their existing contract.
Rivkin sued the brokerage and the salesperson, claiming that the brokerage had breached its fiduciary duties by not disclosing that the competing offer was submitted by another salesperson at the same company.
After reviewing the case, both the trial and the appellate courts determined that only the individual buyer’s representative was bound by statute to act solely on behalf of the client and provide such fiduciary duties as undivided loyalty to that client. The disclosure rule did not apply to the entire brokerage, ruled the court.