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HomeMy WebLinkAboutE-07 Staff Report -Listing Agreement with JLL for ThePromenade at CitrusCONSENT ITEM E-7 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: SERGIO GONZALEZ, CITY MANAGER FROM: KURT CHRISTIANSEN, FAICP, ECONOMIC AND COMMUNITY DEVELOPMENT DIRECTOR DATE: MAY 7, 2018 SUBJECT: REQUEST TO APPROVE LEASING AGREEMENT WITH JONES LANG LASALLE BROKERAGE, INC., FOR THE PURPOSE OF LEASING THE PROMENADE AT CITRUS (890 THE PROMENADE) BACKGROUND: Rosedale Land Partners II, LLC transferred ownership of one parcel of approximately 53,400 square feet (Assessor Parcel Number 8625-056-900) to the City on which Rosedale Land Partners is currently constructing a commercial building of approximately 8,250 square feet. The subject site is located at 890 The Promenade and consists of six (6) retail suites. The City’s primary interest is to lease out the suites to continue growing a diverse and stable economic base that supports ongoing City services and programs. Staff requested from its commercial real estate consultant, Jones Lang LaSalle (JLL) to coordinate retailer and broker solicitations. City Staff and JLL are in the process of reviewing terms with prospective tenants for the site. The proposed actions approve a Listing Agreement with JLL as the City’s leasing agent for the purpose of leasing and marketing commercial real estate property at 890 The Promenade. RECOMMENDATION: Staff recommends the City Council take the following actions: 1) Approve a listing agreement with JLL to render commercial real estate leasing and marketing services; 2)Authorize the City Manager to execute, in a form acceptable to the City Attorney, on behalf of the City; and 3) Approve $140,000 in General Fund for the JLL Listing Agreement. APPROVED CITY COUNCIL 5/7/2018 Approve Listing Agreement with Jones Lang LaSalle Brokerage, Inc. May 7, 2018 Page 2 ANALYSIS: At the City Council meeting of February 20, 2018, the City Council approved non-binding letters of intent with various retail concepts for The Promenade at Citrus. Since then, City Staff and JLL have been reviewing terms and conditions with interested tenants. Although JLL has been driving retailer interest under their current agreement with the City, a separate agreement is required that outlines the City’s financial responsibility for JLL’s listing services. The Promenade at Citrus is currently under construction and is anticipated to be completed in June. Once construction is complete, the site will be available for leasing and tenant improvements. The proposed action approves a Listing Agreement with JLL as its leasing agent for the purpose of leasing and marketing commercial real estate property at The Promenade at Citrus. The proposed Listing Agreement outlines the terms and compensation JLL will receive on new leases and expansions upon execution of lease agreements with prospective tenants and when tenants open for business. For new leases, 50% of the commission will be due upon the execution of the lease between the City and prospective tenant and the remaining 50% of the commission will be due upon tenant opening for business. For expansions and renewals 100% of the commission will be due and payable upon execution of the lease amendment. The lease term is limited to ten (10) years with no payment options if exercised by the tenant. The proposed cost is as follows: JLL had originally proposed the following to perform leasing and marketing services: The original proposal committed the City for a total of twenty (20) years and although the standard market leasing commission rates proposed were amongst the average, City Staff felt it was in the City’s best interest to reduce the rate and commitment. City Staff was able to negotiate with JLL to lower the cost of the agreement and the length of the term. The average lease contract length between tenant and landlord is roughly ten (10) years which is comparable to that of the proposed agreement. With a Cooperating Broker Standard Market Leasing Commission Rate 5% Of base rent for the first 60 months that rent is paid; plus 2.5% Of base rent for the next 60 months that rent is paid. Without a Cooperating Broker Standard Market Leasing Commission Rate 3% Of base rent for the first 60 months that rent is paid; plus 2% Of base rent for the next 60 months that rent is paid. With a Cooperating Broker Standard Market Leasing Commission Rate 6% Of the total base rental rate for the first 60 months that rent is paid; plus 3% Of the total base rental rate for the next 60 months that rent is paid; plus 2% Of the total base rental rate for the next 120 months that rent is paid. Approve Listing Agreement with Jones Lang LaSalle Brokerage, Inc. May 7, 2018 Page 3 In addition, the Listing Agreement was reviewed by Best Best & Krieger, the City’s law firm, and revised to be in line with market terms. FISCAL IMPACT: In accordance with Ordinance No. 2015-O6 relating to bidding, contracting and purchase of projects, supplies, services and equipment, all written contracts exceeding $25,000 shall be approved/awarded by the City Council. Upon Council approval, Staff will prepare a budget amendment and allocate $140,000 under account #10-35-630-000-6399 for the JLL Listing Agreement. There are no up-front costs to the City until lease agreements with tenants are executed and at the time the tenant opens for business. Prepared by: Reviewed and Approved: Carina Campos Kurt Christiansen, FAICP Economic Development Specialist Economic and Community Development Director Reviewed and Approved: Reviewed and Approved: Louie F. Lacasella Sergio Gonzalez Senior Management Analyst City Manager Attachments: 1) Listing Agreement with Jones Lang LaSalle Brokerage, Inc. 45635.01000\30832026.3 LISTING AGREEMENT This AGREEMENT, dated _______________, 2018 (the “Commencement Date”), by and between THE CITY OF AZUSA (hereinafter "Owner") and JONES LANG LASALLE BROKERAGE, INC., a Texas corporation (hereinafter "JLL"). BACKGROUND A.Owner owns 890 The Promenade, Azusa, CA -The Promenade at Citrus (“Property”). B.Owner desires to engage JLL as its sole and exclusive leasing agent for the Property. C.JLL desires to accept such employment and is engaged in the business of leasing and marketing properties. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: ARTICLE 1. TERM; TERMINATION 1.1 Initial Term. JLL’s duties and responsibilities under this Agreement shall begin on the Commencement Date and shall end twelve (12) months thereafter, unless sooner terminated as provided herein. 1.2 Termination. Either party may, at its option and in its sole and absolute discretion, elect to terminate this Agreement upon thirty (30) days’ prior written notice to the other party. 1.3 Pending Matters. In addition to all amounts payable to JLL during the term of this Agreement, Owner shall pay JLL leasing commissions to be calculated and paid as provided on Schedule A with respect to any new leases, lease expansions, relocations, renewals and/or extensions executed and delivered by Owner and the applicable tenant within six (6) months following the expiration or earlier termination of this Agreement, if (a) prior to such expiration or termination, (i) JLL has engaged in negotiations with the prospective tenant (or its agent) regarding the possibility of a lease or other transaction, or (ii) the prospective tenant (or its agent) has toured the Property; and (b) within six (6) months immediately following the expiration or termination of this Agreement, a lease or other agreement between Owner (or the then-owner of the Property) and the tenant is executed. JLL shall deliver a written list of all such prospective tenants to Owner no later than ten (10) days after the expiration or termination of this Agreement. ARTICLE 2. SERVICES 2.1 Services. Owner hereby engages JLL as its exclusive broker for the purpose of leasing any or all space in the Property (the “Services”). JLL shall perform the Services in accordance with applicable professional standards. Owner shall refer all inquiries to JLL and conduct all negotiations through JLL (under the supervision, direction and control of Owner), but JLL has no authority to obligate Owner until expressly authorized in writing by Owner. Erik Westedt & Blake Kaplan of JLL (the “Project Team”) will perform the Services under this Agreement. JLL may cooperate with cooperating brokers, including representatives of JLL or its affiliates other than Project Team members (“JLL Non-Team Brokers”), in leasing space within the Property. In such case, the JLL Non-Team Brokers shall be considered cooperating Attachment 1 45635.01000\30832026.3 brokers for purposes of this Agreement. In the event that a cooperating broker shall procure a tenant for space within the Property, and such tenant enters into a lease with Owner, Owner shall pay JLL and the cooperating broker the commissions computed in accordance with the rates set forth on Schedule A to this Agreement. In the event any Project Team member exclusively represents a prospective tenant, such Project Team member will recuse himself or herself from representation of Owner hereunder and will be considered a JLL Non-Team Broker for purposes of the applicable lease transaction, and the remaining Project Team members will continue to represent Owner pursuant to the terms of this Agreement. Such recused Project Team member shall in all events maintain the confidentiality of Owner’s confidential information. All final business decisions shall be made solely by Owner. All tenant leases shall be prepared by Owner’s counsel with assistance from JLL. 2.2 Advertising. JLL shall prepare and submit to Owner for approval a proposed marketing plan and budget for the leasing, promotion, and marketing of the Property (which, once approved, shall be the “Approved Marketing Plan and Budget”). Promotional materials shall be provided by JLL at its sole cost, including property signage and Loopnet/Costar/social media or other electronic listings (“JLL’s Marketing Costs”). Such proposed plan shall include proposed leasing guidelines (including allowances for tenant improvements, commission rates and any broker incentives, if applicable) for use in marketing and leasing the Property. JLL shall cause advertising plans and promotional material to be prepared to further rentals in accordance with the Approved Marketing Plan and Budget. Such plans or material shall only be used if approved in advance by Owner. 2.3 Leasing Expenses. Except for those items which are JLL’s Marketing Costs, no third party or out of pocket costs shall be incurred without Owner’s prior written approval. JLL shall bear all out-of- pocket expenses, if any, directly related to negotiating leases for space in the Property, including, without limitation, the cost of signage, postage, mailings, custom presentation materials (e.g., large boards), descriptive brochures, websites and other forms of advertising of the space, all of which shall be included in the Approved Marketing Plan and Budget or otherwise approved by Owner in writing. JLL may create a website for the Property using a third-party provider, as set forth in the Approved Marketing Plan, or JLL may use internal resources. If JLL uses internal resources to create a website, then upon the expiration or earlier termination of this Agreement, JLL will retain the rights to the website. If Owner desires to purchase the rights to the website, Owner may do so at its discretion for $5,000.00. This payment will be due within thirty (30) days of Owner’s notice to JLL, but in no event later than the effective date of any termination or expiration of the Agreement. 2.4 Security Deposits. JLL shall not accept security deposits, letters of credit or any other security or financial instruments on behalf of Owner and shall instruct tenants to tender such deposits and instruments directly to Owner or persons designated by Owner. 2.5 Technical Matters. Owner acknowledges that JLL is not an expert in and is not responsible for any legal, regulatory, tax, accounting, engineering, environmental or other technical matters, all of which shall be solely Owner’s responsibility. JLL shall, based on its professional expertise, assist Owner in connection with such matters, including giving Owner recommendations as to experts to use for such matters and coordinating the work of such experts with the other parties working on the transaction, but in no event shall JLL have responsibility for the work of such experts. ARTICLE 3. INDEMNIFICATION JLL will defend (with counsel reasonably acceptable to Owner), indemnify and hold harmless Owner and its affiliates, and each and all of their officers, directors, employees, partners and agents, from and against all third party claims, losses, liabilities and expenses, including reasonable attorneys’ fees, expert witness fees and court costs (“Loss”), to the extent arising out of JLL’s negligence or intentional 45635.01000\30832026.3 misconduct in connection with this Agreement. Owner will defend (with counsel reasonably acceptable to JLL), indemnify and hold harmless JLL and its affiliates, and each of their officers, directors, employees, shareholders and agents, from and against all Loss arising out of or in connection with the condition of the Property; any incorrect information, or any direction or consent, given by Owner to JLL; or any claim by a third party broker arising from a breach by Owner of its obligations to pay commissions hereunder. ARTICLE 4. COMPENSATION JLL shall receive remuneration for its services in accordance with the terms of this Agreement and Schedule A. ARTICLE 5. NOTICES All notices, demands, consents and reports provided for in this Agreement shall be in writing and shall be given to Owner or JLL at the address set forth below or at such other address as they individually may specify thereafter in writing: OWNER: City of Azusa JLL: Jones Lang LaSalle 3281 E. Guasti Rd. #850 Ontario, CA 91761 Attention: Erik Westedt with copies to: Jones Lang LaSalle 200 East Randolph Drive Chicago, IL 60601 Attention: General Counsel Such notice or other communication shall be delivered by hand or by nationally recognized overnight courier service. For purposes of this Agreement, notices will be deemed to have been given upon receipt or refusal of receipt. ARTICLE 6. GENERAL PROVISIONS 6.1 Confidentiality; Publicity. JLL shall keep confidential all non-public information obtained from Owner relating to the Services, except as reasonably required in order to perform the Services hereunder, for the term of this Agreement and for two (2) years after the expiration or termination of this Agreement. In addition, any and all data and studies created in connection with the Services shall belong to Owner. Owner agrees that JLL may publicize its role in any transaction Owner enters into, provided JLL does not disclose any financial information regarding such transaction. JLL may use Owner’s name in a list of clients for marketing and promotional purposes. 6.2 Limited Liability. Neither party shall be liable to the other for, and each party hereby waives any and all rights to claim against the other, any special, indirect, incidental, consequential, punitive or exemplary damages in connection with this Agreement, including, but not limited to, lost profits, even if the party has knowledge of the possibility of such damages. Excluding (i) third party claims for bodily injury or property damage, and (ii) claims based on JLL’s gross negligence or intentional misconduct, in no 45635.01000\30832026.3 event shall JLL’s liability to Owner exceed the greater of (x) two hundred percent (200%) of the fees paid to JLL pursuant to this Agreement, or (y) $500,000. 6.3. Miscellaneous. This Agreement, together with the Rider(s), Schedule(s)and Exhibits(s), if any, attached hereto, represents the complete and final understanding between JLL and Owner with respect to the Services and may not be waived, amended, or modified by either party unless such waiver, amendment or modification is in writing and signed by both parties. If any provision of this Agreement is invalid under applicable law, such invalidity shall not affect the other provisions of this Agreement. This Agreement shall be governed by the laws of the state where the Property to be leased is located. This Agreement is binding upon the parties hereto and their respective successors and assigns; provided, however, this Agreement may not be assigned by either party except to any other entity that acquires all or substantially all of the business and employees of such party, and except that JLL may delegate its duties to a state-licensed affiliate. 6.4. Non-Discrimination. The parties hereto acknowledge that it is illegal to refuse to display, lease or sell to or from any person because of one’s membership in a protected class, e.g., race, color, religion, national origin, sex, ancestry, age, marital status, physical or mental handicap, familial status, or any other protected class, and agree not to discriminate unlawfully against anyone in a protected class. 6.5 Survival. The provisions of Section 1.3, Articles 3, 4 and Sections 6.1, 6.2, 6.5, 6.6, 6.7, and 6.8 of this Agreement shall survive the expiration or termination of this Agreement. 6.6 Attorney’s Fees; JURY WAIVER; Late Payments. If either party shall institute any action or proceeding against the other relating to the provisions of this Agreement, the unsuccessful party in the action or proceeding shall reimburse the prevailing party for all reasonable expenses and attorneys’ fees and disbursements. THE PARTIES HEREBY WAIVE TRIAL BY JURY. Delinquent payments hereunder shall earn interest at the rate of 8 percent per annum from the date due until paid. 6.7 Sale of the Property. Upon a sale or other conveyance of the Property, all conditions to the payment of any leasing commissions will be deemed satisfied. In the event of such a sale or other conveyance of the Property by Owner, any portion of any leasing commission that has not yet been paid to JLL shall thereupon be due and payable by Owner in full on the closing of the conveyance of the Property. 6.8 Non-Solicitation of Employees. Owner agrees not to, directly or indirectly, attempt to persuade or solicit any employee of JLL to terminate such employment with JLL and agrees not to hire any employee of JLL while such employee is employed with JLL and for a period of one (1) year after termination of employment with JLL, including, without limitation, engaging such employee or former employee as an independent contractor or as an employee of any person other than JLL or any affiliate of JLL. In addition to all other remedies available to JLL, because the parties acknowledge the difficulty of calculating actual damages for a breach of this provision, Owner agrees to pay JLL, as liquidated damages and not as a penalty, the sum of $100,000.00 for each employee hired directly or indirectly by Owner or any other person in violation of this Agreement. 6.9 Counterparts; Electronic/Facsimile Signature. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The parties agree that an electronic or facsimile signature shall be considered an original signature. 6.10 Authorization. The individual executing this Agreement personally certifies and warrants that he or she is an officer of Owner and is duly authorized to sign this Agreement, and that by his or her execution hereof, this Agreement shall be legally binding and enforceable. 45635.01000\30832026.3 6.11 OFAC. Owner represents and warrants that neither it nor any of its employees is a person or entity with whom U.S. entities are restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including those named on OFAC’s Specially Designated and Blocked Persons List) or under any statute, executive order or other governmental action. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first written below. CITY OF AZUSA By: Name: Title: Date: JONES LANG LASALLE BROKERAGE, INC. By: Name: Charlie P. Smith Title: Chief Operating Officer-LA Brokerage Date: 45635.01000\30832026.3 SCHEDULE A JLL’S COMPENSATION I. JLL’s Compensation A. New Leases and Expansions • Transaction Without a Cooperating Broker – One full commission, calculated in accordance with the Standard Market Leasing Commission Rates below, shall be paid by Owner to JLL. • Transaction With a Cooperating Broker – JLL shall share commission with Cooperating Broker, calculated in accordance with the Standard Market Leasing Commission Rates below to be paid by Owner to JLL. B. Renewals and Extensions –If JLL is still the listing broker at the time of renewal, one-half of the amounts listed above for new leases if the extension is a new extension and not an option exercise within an existing lease. II. Time of Payment For new leases, 50% of the commission shall be due and payable upon execution of the lease by Owner and the prospective tenant; the remaining 50% of the commission shall be due and payable upon the opening of the business in the premises. For expansions and renewals, 100% of the commission shall be due and payable upon execution of the lease amendment or other definitive document evidencing such transaction by Owner and the tenant. Owner shall pay all amounts payable within thirty (30) business days of the date of JLL’s invoice to Owner for same. III. Standard Market Leasing Commission Rates With a cooperating broker 5% of Base Rent for the first 60 months that rent is paid; plus 2.5% of Base Rent for the next 60 months that rent is paid Without a cooperating broker 3% of Base Rent for the first 60 months that rent is paid; plus 2% of Base Rent for the next 60 months that rent is paid; **The lease term is limited to 10 years with no payments for options if exercised by the tenant. For purposes of this Agreement, “Base Rent” shall mean the base rent payable by a tenant. The following shall be excluded from Base Rent: a) Any free rent or other abatement of rent allowed by Owner (however, for purposes of calculating the commission payable to JLL, such free rent or abatement shall be amortized over the initial term of the lease and deducted in equal annual installments from the Base Rent otherwise due and payable during such initial term); 45635.01000\30832026.3 b) Amounts payable, by reason of rent inclusion or otherwise, for electricity, after-hours utilities, utility services, heat and/or air-conditioning or other services; c) Payments by tenant of any additional rent escalation charges for operating expenses (including management recovery cost) of the Property; real estate taxes; sales or rental taxes; wage or labor rate escalation payments, cost of living increases or any other similar payments; or any lease cancellation payments; and d) Any moving costs of tenant paid by Owner or credited to tenant. 45635.01000\30832026.3 RIDER TO EXCLUSIVE LEASING AGREEMENT This Rider supplements the terms of the Exclusive Leasing Agreement (the “Agreement”) to which it is attached and in the event of any conflict between the provisions set forth in this Rider and the Agreement, the terms and provisions of this Rider shall control. Capitalized terms used in this Rider that are not otherwise defined in this Rider shall have the meanings given to them in the Agreement. ARTICLE 7. STATE-SPECIFIC PROVISIONS (CALIFORNIA) 7.1 License Number(s). The license number(s) of each of the members of the Project Team are set forth in the table below: Project Team Member License Number Erik Westedt 01372758 Blake Kaplan 02001158 Jones Lang LaSalle Brokerage, Inc. 01856260 7.2 Real Estate Agency Relationship Disclosure. Owner acknowledges that it has received the “Disclosure Regarding Real Estate Agency Relationship” attached hereto as EXHIBIT A. 45635.01000\30832026.3 EXHIBIT A DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP (as required by the California Civil Code) When you enter into a discussion with a real estate agent regarding a real estate transaction, you should from the outset understand what type of agency relationship or representation you wish to have with the agent in the transaction. LANDLORD’S AGENT A Landlord’s agent under a listing agreement with the Landlord acts as the agent for the Landlord only. A Landlord’s agent or a subagent of that agent has the following affirmative obligations: To the Landlord: a. A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Landlord. To the Tenant and the Landlord: a. Diligent exercise of reasonable skill and care in performance of the agent’s duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the parties. An agent is not obligated to reveal to either party any confidential information obtained from the other party that does not involve the affirmative duties set forth above. TENANT’S AGENT A leasing agent can, with a Tenant’s consent, agree to act as agent for the Tenant only. In these situations, the agent is not the Landlord’s agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Landlord. An agent acting only for a Tenant has the following affirmative obligations: To the Tenant: a. A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Tenant. To the Tenant and the Landlord: a. Diligent exercise of reasonable skill and care in performance of the agent’s duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the parties. An agent is not obligated to reveal to either party any confidential information obtained from the other party that does not involve the affirmative duties set forth above. AGENT REPRESENTING BOTH LANDLORD AND TENANT A real estate agent, either acting directly or through one or more associate licensees, can legally be the agent of both the Landlord and the Tenant in a transaction, but only with the knowledge and consent of both the Landlord and the Tenant. In a dual agency situation, the agent has the following affirmative obligations to both the Landlord and the Tenant: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either the Landlord or the Tenant. b. Other duties to the Landlord and the Tenant as stated above in their respective sections. In representing both Landlord and Tenant, the agent may not, without the express permission of the respective party, disclose to the other party that the Landlord will accept a price less than the listing price or that the Tenant will pay a price greater than the price offered. The above duties of the agent in a real estate transaction do not relieve a Landlord or Tenant from the responsibility to protect his or her own interests. You should carefully read all agreements to assure that they adequately express your understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. Throughout your real property transaction you may receive more than one disclosure form, depending upon the number of agents assisting in the transaction. The law requires each agent with whom you have more than a casual relationship to present you with this disclosure form. You should read its contents each time it is presented to you, considering the relationship between you and the real estate agent in your specific transaction. 45635.01000\30832026.3 This disclosure form includes the provisions of Sections 2079.13 to 2079.24, inclusive, of the Civil Code set forth on the reverse hereof. Read it carefully. I/WE ACKNOWLEDGE RECEIPT OF A COPY OF THIS DISCLOSURE AND THE PORTIONS OF THE CALIFORNIA CIVIL CODE PRINTED ON THE FOLLOWING PAGE. We acknowledge that Agent represents us as (check one): Tenant Landlord _____________________________________________________________________ Date ____________ Agent: Jones Lang LaSalle Brokerage, Inc. 45635.01000\30832026.3 CA Civil Code Sections 2079.13 through 2079.24 (2079.16 appears on the previous page) 2079.13. As used in Sections 2079.14 to 2079.24, inclusive, the following terms have the following meanings: (a) “Agent” means a person acting under provisions of Title 9 (commencing with Section 2295) in a real property transaction, and includes a person who is licensed as a real estate broker under Chapter 3 (commencing with Section 10130) of Part 1 of Division 4 of the Business and Professions Code, and under whose license a listing is executed or an offer to purchase is obtained. (b) “Associate licensee” means a person who is licensed as a real estate broker or salesperson under Chapter 3 (commencing with Section 10130) of Part 1 of Division 4 of the Business and Professions Code and who is either licensed under a broker or has entered into a written contract with a broker to act as the broker’s agent in connection with acts requiring a real estate license and to function under the broker’s supervision in the capacity of an associate licensee. The agent in the real property transaction bears responsibility for his or her associate licensees who perform as agents of the agent. When an associate licensee owes a duty to any principal, or to any buyer or seller who is not a principal, in a real property transaction, that duty is equivalent to the duty owed to that party by the broker for whom the associate licensee functions. (c) “Buyer” means a transferee in a real property transaction, and includes a person who executes an offer to purchase real property from a seller through an agent, or who seeks the services of an agent in more than a casual, transitory, or preliminary manner, with the object of entering into a real property transaction. “Buyer” includes vendee or lessee. (d) “Commercial real property” means all real property in the state, except single-family residential real property, dwelling units made subject to Chapter 2 (commencing with Section 1940) of Title 5, mobilehomes, as defined in Section 798.3, or recreational vehicles, as defined in Section 799.29. (e) “Dual agent” means an agent acting, either directly or through an associate licensee, as agent for both the seller and the buyer in a real property transaction. (f) “Listing agreement” means a contract between an owner of real property and an agent, by which the agent has been authorized to sell the real property or to find or obtain a buyer. (g) “Listing agent” means a person who has obtained a listing of real property to act as an agent for compensation. (h) “Listing price” is the amount expressed in dollars specified in the listing for which the seller is willing to sell the real property through the listing agent. (i) “Offering price” is the amount expressed in dollars specified in an offer to purchase for which the buyer is willing to buy the real property. (j) “Offer to purchase” means a written contract executed by a buyer acting through a selling agent that becomes the contract for the sale of the real property upon acceptance by the seller. (k) “Real property” means any estate specified by subdivision (1) or (2) of Section 761 in property that constitutes or is improved with one to four dwelling units, any commercial real property, any leasehold in these types of property exceeding one year’s duration, and mobilehomes, when offered for sale or sold through an agent pursuant to the authority contained in Section 10131.6 of the Business and Professions Code. (l) “Real property transaction” means a transaction for the sale of real property in which an agent is employed by one or more of the principals to act in that transaction, and includes a listing or an offer to purchase. (m) “Sell,” “sale,” or “sold” refers to a transaction for the transfer of real property from the seller to the buyer, and includes exchanges of real property between the seller and buyer, transactions for the creation of a real property sales contract within the meaning of Section 2985, and transactions for the creation of a leasehold exceeding one year’s duration. (n) “Seller” means the transferor in a real property transaction, and includes an owner who lists real property with an agent, whether or not a transfer results, or who receives an offer to purchase real property of which he or she is the owner from an agent on behalf of another. “Seller” includes both a vendor and a lessor. (o) “Selling agent” means a listing agent who acts alone, or an agent who acts in cooperation with a listing agent, and who sells or finds and obtains a buyer for the real property, or an agent who locates property for a buyer or who finds a buyer for a property for which no listing exists and presents an offer to purchase to the seller. (p) “Subagent” means a person to whom an agent delegates agency powers as provided in Article 5 (commencing with Section 2349) of Chapter 1 of Title 9. However, “subagent” does not include an associate licensee who is acting under the supervision of an agent in a real property transaction. 2079.14. Listing agents and selling agents shall provide the seller and buyer in a real property transaction with a copy of the disclosure form specified in Section 2079.16, and, except as provided in subdivision (c), shall obtain a signed acknowledgment of receipt from that seller or buyer, except as provided in this section or Section 2079.15, as follows: (a) The listing agent, if any, shall provide the disclosure form to the seller prior to entering into the listing agreement. (b) The selling agent shall provide the disclosure form to the seller as soon as practicable prior to presenting the seller with an offer to purchase, unless the selling agent previously provided the seller with a copy of the disclosure form pursuant to subdivision (a). (c) Where the selling agent does not deal on a face-to-face basis with the seller, the disclosure form prepared by the selling agent may be furnished to the seller (and acknowledgment of receipt obtained for the selling agent from the seller) by the listing agent, or the selling agent may deliver the disclosure form by certified mail addressed to the seller at his or her last known address, in which case no signed acknowledgment of receipt is required. (d) The selling agent shall provide the disclosure form to the buyer as soon as practicable prior to execution of the buyer’s offer to purchase, except that if the offer to purchase is not prepared by the selling agent, the selling agent shall present the disclosure form to the buyer not later than the next business day after the selling agent receives the offer to purchase from the buyer. 2079.15. In any circumstance in which the seller or buyer refuses to sign an acknowledgment of receipt pursuant to Section 2079.14, the agent, or an associate licensee acting for an agent, shall set forth, sign, and date a written declaration of the facts of the refusal. 2079.17. (a) As soon as practicable, the selling agent shall disclose to the buyer and seller whether the selling agent is acting in the real property transaction exclusively as the buyer’s agent, exclusively as the seller’s agent, or as a dual agent representing both the buyer and the seller. This relationship shall be confirmed in the contract to purchase and sell real property or in a separate writing 45635.01000\30832026.3 executed or acknowledged by the seller, the buyer, and the selling agent prior to or coincident with execution of that contract by the buyer and the seller, respectively. (b) As soon as practicable, the listing agent shall disclose to the seller whether the listing agent is acting in the real property transaction exclusively as the seller’s agent, or as a dual agent representing both the buyer and seller. This relationship shall be confirmed in the contract to purchase and sell real property or in a separate writing executed or acknowledged by the seller and the listing agent prior to or coincident with the execution of that contract by the seller. (c) The confirmation required by subdivisions (a) and (b) shall be in the following form: _ (DO NOT COMPLETE, SAMPLE ONLY) _ is the agent of (check one): the landlord/seller exclusively (Name of Listing Agent) both the tenant/buyer and landlord/seller _ (DO NOT COMPLETE, SAMPLE ONLY) _ is the agent of (check one): the tenant/buyer exclusively (Name of Selling Agent if not the same as Listing Agent) the landlord/seller exclusively both the tenant/buyer and the (d) The disclosures and confirmation required by this section shall be in addition to the disclosure required by Section 2079.14. 2079.18. No selling agent in a real property transaction may act as an agent for the buyer only, when the selling agent is also acting as the listing agent in the transaction. 2079.19. The payment of compensation or the obligation to pay compensation to an agent by the seller or buyer is not necessarily determinative of a particular agency relationship between an agent and the seller or buyer. A listing agent and a selling agent may agree to share any compensation or commission paid, or any right to any compensation or commission for which an obligation arises as the result of a real estate transaction, and the terms of any such agreement shall not necessarily be determinative of a particular relationship. 2079.20. Nothing in this article prevents an agent from selecting, as a condition of the agent’s employment, a specific form of agency relationship not specifically prohibited by this article if the requirements of Section 2079.14 and Section 2079.17 are complied with. 2079.21. A dual agent shall not disclose to the buyer that the seller is willing to sell the property at a price less than the listing price, without the express written consent of the seller. A dual agent shall not disclose to the seller that the buyer is willing to pay a price greater than the offering price, without the express written consent of the buyer. This section does not alter in any way the duty or responsibility of a dual agent to any principal with respect to confidential information other than price. 2079.22. Nothing in this article precludes a listing agent from also being a selling agent, and the combination of these functions in one agent does not, of itself, make that agent a dual agent. 2079.23. (a) A contract between the principal and agent may be modified or altered to change the agency relationship at any time before the performance of the act which is the object of the agency with the written consent of the parties to the agency relationship. (b) A lender or an auction company retained by a lender to control aspects of a transaction of real property subject to this part, including validating the sales price, shall not require, as a condition of receiving the lender’s approval of the transaction, the homeowner or listing agent to defend or indemnify the lender or auction company from any liability alleged to result from the actions of the lender or auction company. Any clause, provision, covenant, or agreement purporting to impose an obligation to defend or indemnify a lender or an auction company in violation of this subdivision is against public policy, void, and unenforceable. 2079.24. Nothing in this article shall be construed to either diminish the duty of disclosure owed buyers and sellers by agents and their associate licensees, subagents, and employees or to relieve agents and their associate licensees, subagents, and employees from liability for their conduct in connection with acts governed by this article or for any breach of a fiduciary duty or a duty of disclosure.