New Real Estate Disclosure Bill, Spearheaded by Hughes Marino, Signed into California State Law

Jason Hughes

ORANGE COUNTY, CA, Aug. 18, 2014 - Jason Hughes, President and CEO of California commercial real estate brokerage company Hughes Marino, announced today that on Friday, August 15, Governor Brown signed into law the real estate broker agency disclosure bill known as SB 1171.

 Hughes, who conceived of the need for this form of broker disclosure more than two years ago, asked State Senator Ben Hueso to sponsor it for him.

 Effective January 1, 2015, commercial real estate salespersons and brokers will need to provide, in writing, their exact proposed agency role in the future transaction. In addition, this disclosure will need to be signed by the potential client PRIOR to moving forward with any representation.

 “It was quite an experience to actually conceive and facilitate getting a new law passed,” said Hughes. “I’m very proud of it – as it will create more consumer transparency in an industry that’s been operating for decades as landlords' marketing arms. Now when you think you’re getting non-conflicted real estate representation, it will actually be true.”

 Hughes explained that the reason he asked Senator Hueso to sponsor this new law was that he recognized a deep need for transparency in the commercial real estate industry.

Gov. Jerry Brown

“It astounded me that commercial real estate salespersons and brokers were not required to provide written disclosure to their clients about any conflicts of interests they may have – or who the brokers were actually representing,” Hughes explained.

“In residential real estate, agents are required by law to provide such disclosure immediately prior to engaging with a client.

"However, brokers for commercial transactions had no such requirement. What resulted was a tremendous amount of conflicted representation, which almost always adversely affected companies who were buying or leasing commercial space.”

California State Senator Ben Hueso

 According to the new law, the written disclosure must fall into one of three statements: (1) Agent represents only the landlord/seller; (2) Agent represents only the tenant/buyer; or (3) Dual Agency: agent represents both the landlord/seller and the tenant/buyer.

There will be a Dual Agency definition immediately below the three choices stating that a Dual Agent is not allowed to provide any confidential information between the two parties, unless written consent is obtained.

Breach of this confidentiality will have legal consequences for the broker.

For a complete copy of the company’s news release, please contact:

Amanda Brenner or Jenn Quader

(949) 955-7940

abrenner@browermillercole.com