A November decision by the California Supreme Court purportedly about the law of agency was really a disclosure case related to square footage of a home, according to Legal Hotline Attorney Betsy Urbance and Transaction Helpline Attorney Jeff Baker at the Illinois REALTORS® Legal Webinar Thursday morning in Springfield.


Betsy Urbance

The case of Horiike v. Coldwell Banker Residential Brokerage Company Services centered on the advertised living space and records that showed less square footage. A suit by Horiike contended that Coldwell Banker and the seller’s agent should have known or learned about the discrepancy and disclosed it. Although dismissed at trial as a nonsuit, the California Court of Appeals ruled in favor of Horiike. The California Supreme Court upheld the Court of Appeals decision.

However, Urbance and Baker said this case should not cause association members to worry as the case was truly one about disclosure. The Illinois Real Estate License Act has the presumption of designated agency, which is different than the California agency laws and brokers in Illinois only have a duty to disclose material physical defects they are actually aware of. The real question in Illinois, they said, is whether a “defect” is a known latent physical defect in the property.


Jeff Baker

Horiike v. Coldwell Banker is just one of several cases discussed by the Illinois REALTORS® Legal Services team.

Other topics mentioned during the webinar included state and federal legislation scheduled to expire in late December or go into effect in January. Also the team talked about reviewing insurance coverages, updates to Illinois REALTORS® forms, record-keeping and answering questions from members.

For more information on this member-only benefit, REALTORS® can log in and download the webinar or listen to the audio-only version.