Citation. 22 Ill.14 Conn. App. 46, 539 A.2d 609 (App. Ct. 1988)
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Brief Fact Summary.
The plaintiffs hire a real estate broker who in turn makes misrepresentations and withhold information from the plaintiffs regarding the true market value of the home. The broker enters into a sub-broker agreement with the defendants and they buy the plaintiffs home at a price of $115,000, only to sell the property six days later at a profit of $45,000.
Synopsis of Rule of Law.
A real estate broker has a fiduciary duty to act in the best interest of their client, and cannot withhold information of negotiations from other prospective buyers. Real estate brokers must act within the code of conduct required by the laws of Connecticut in the General Statues.
The plaintiffs engaged Robert Schwartz, a Norwalk Connecticut real estate broker for guidance in the sale of their property. Schwartz consults with Blackwelder and Opert as to the market value of the property and Schwartz and Blackwelder and Opert agree to co-broke the property. They convince the owners to list the property at $125,000 and immediately make their own offer of $115,000 misrepresenting that they will live at the property, and instead immediately contract to sell the home to another buyer at $160,000, making a profit of $45,000 in the six days the mortgage was held by the defendants.
Whether a real estate broker owed a fiduciary duty to act in the best interest of their client and must act in accordance with the code of conduct by the laws of the state.
The trial court did not err in finding that the essential claims of breach of duty and intentional misrepresentation set out in the plaintiffs’ complaint were proven by the facts presented, nor in finding that the conduct of the defendants entitled the plaintiffs to an award of damages.
In this case the fact that the real estate brokers were intentionally misrepresenting information to their clients was quite obvious, they had misrepresented that they were going to live at the property all the while being involved in negotiations and contracting with another party for a sale almost immediately after the purchase. The court seemed to weigh the deceptive acts and element of unfairness to the parties relying on their real estate brokers for sound information quite heavily in this case.