When should agency relationships be disclosed according to California law?

The appropriate time to disclose agency relationships according to California law is as soon as it is practicable. This requirement ensures that all parties involved in a real estate transaction are informed about who represents whom in the transaction, allowing them to make informed decisions. The intent behind this regulation is to prevent misunderstandings and conflicts of interest, fostering an environment of transparency and trust.

Disclosing agency relationships at the earliest practical moment allows clients to understand their representation and the obligations that come with it. This can happen during initial discussions or when any material information that would affect the clients’ decisions is presented. The law emphasizes that while the disclosure should not cause undue delay in the transaction process, it should occur early enough to provide clarity and full understanding.

In contrast, waiting until after an offer is made could create confusion, as the clients may have already made decisions based on incomplete information regarding representation. Similarly, disclosing relationships just at closing would not serve the purpose of informing clients ahead of key decisions and commitments they need to make during the transaction process. Not disclosing relationships before signing documents can also lead to significant ethical and legal issues, as parties may unwittingly become subject to conflicts of interest without their knowledge.