Urban Sunrise LLC v. Vogt
Facts: A buyer enters into a purchase agreement. The broker informs the buyer the property is in a very high fire severity zone, and it is their responsibility to obtain fire insurance. When the buyer cannot close escrow by the deadline, the seller agrees to extend escrow on the condition the buyer provides a larger, non-refundable deposit than originally agreed to in the purchase agreement. The buyer agrees but is unable to obtain fire insurance and does not close escrow. The seller receives the deposit as a non-refundable penalty.
Claim: The buyer claims the broker breached their fiduciary duty by allowing the buyer to make a larger non-refundable deposit since the broker knew the property was in a very high fire severity zone making it difficult to obtain fire insurance and preventing the buyer from closing escrow.
Counterclaim: The broker claims they did not breach their fiduciary duty owed to the buyer since the buyer knew the property was in a very high fire severity zone and it was their responsibility to obtain fire insurance before agreeing to the larger non-refundable deposit.
Holding: A California appeals court holds the broker did not breach their fiduciary duty owed the buyer by having them supply a larger nonrefundable deposit since failing to close escrow due to an inability to obtain fire insurance was the responsibility of the buyer. Further, a broker is not expected to be an expert in fire insurance. [Urban Sunrise LLC v. Vogt (2026) 348 CA3rd 254]
Related RCDs:
Related Reading:
The seller agent and the prospective buyer
Due diligence demeanor in an agency
Homeowners insurance and wildfires
Related Video:
