‘Secret profit’ raises agency disclosure issue

Did listing broker violate fiduciary duty to her seller?

Jerry owns a shopping center. He hired Patricia, a real estate broker, to lease vacant stores and to find a buyer for the shopping center. They agreed she would receive a 2 percent sales commission when she produces an acceptable purchase offer. More than a year later, Patricia offered to buy the shopping center for $11 million. She told Jerry that was the market value of the property. Relying on her representations, Jerry accepted Patricia's purchase offer. Purchase Bob Bruss reports online. Later, Patricia asked Jerry for permission to assign her purchase contract to another buyer. He agreed after again being told by Patricia the shopping center was only worth $11 million. When the sale closed, Jerry paid Patricia a $110,000 sales commission. However, he later read in the newspaper his shopping center sold for $12.2 million, not the $11 million he received. Jerry then discovered Patricia received a $1.2 million fee for assigning her $11 million purchase contract to another buy...