Real Estate Related Terms | Violations

California Laws: Business and Professional Code 10176 & 10177
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Misrepresentation

10176(a). In real estate transactions this is when a broker or salesperson fails to disclose to his or her principal material facts of which the principal should be made aware.

False Promise

10176(b). A false promise is a false statement about what the promisor is going to do.  According to the California Department of Real Estate (2000), "Many times a false promise is proved by showing that the promise was impossible to perform and that the person making the promise knew it was impossible."

Dual Agency

10176(d). Failure to inform all principals that the licensee is acting as agent for more than one party in the transaction.

Commingling

10176(e). Commingling takes place when a broker has mixed the funds of a principal with the broker's own money.

Definite Termination Date

10176(f). Failure to include a specified termination date on all exclusive listings related to transactions for which a real estate license is required.

Secret Profit

10176(g). "Secret profit cases usually arise when the broker, who already has a higher offer has a higher offer from another buyer, makes a low offer, usually through a dummy purchaser.  The broker then sells the property to the interested buyer for the higher price.  The difference is the secret profit" (California Department of Real Estate, 2000).

Negligence or Incompetence

10177(g). Demonstrated negligence or incompetence in performing any act for which he or she is required to hold a license.

Inducement of Panic Selling

10177(l). Solicited or induced the sale, lease, or listing for sale or lease of residential property on the ground, wholly or in part, of loss of value, increase in crime, or decline of the quality of the schools due to the present or prospective entry into the neighborhood of a person or persons having any characteristic listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those characteristics are defined in Sections 12926, 12926.1, subdivision (m), and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code.

Failure to Disclose Ownership Interest

10177(o). Failed to disclose to the buyer of real property, in a transaction in which the licensee is an agent for the buyer, the nature and extent of a licensee's direct or indirect ownership interest in that real property. The direct or indirect ownership interest in the property by a person related to the licensee by blood or marriage, by an entity in which the licensee has an ownership interest, or by any other person with whom the licensee has a special relationship shall be disclosed to the buyer.

Other California codes that are relevant to the real estate industry are as follows:

10137, 10138, 10140, 10141, 10142, 10145, 10148, 10160, 10161, 10162, 10163, 10165, 10167, 10176, 10177, 10178, 10475.