Kansas Attorney General Opinion 2014-011

May 30, 2014
ATTORNEY GENERAL OPINION NO. 2014- 11
Sherry Diel, Executive Director
Kansas Real Estate Commission
120 SE 6th Ave., Ste. 200
Topeka, KS 66603
Re: 	Personal and Real Property—Real Estate Brokers and Salespersons;
Brokerage Relationships—Imputed Knowledge
Synopsis: 	The Brokerage Relationships in Real Estate Transactions Act (BRRETA)
limits, but does not entirely supplant, the common law liability of real
estate licensees. 	The provisions of K.S.A. 58-30,111 apply equally to
statutory agents and transaction brokers. 	Cited herein: 	K.S.A. 2013
Supp. 58-30,102; K.S.A. 58-30,106; 58-30,107; 58-30,111; K.S.A. 2013
Supp. 58-30,113; K.S.A. 77-109.
* 	* 	*
Dear Ms. Diel:
As Executive Director for the Kansas Real Estate Commission, you ask for our opinion
on 	the 	liability 	of 	real 	estate 	statutory 	agents 	and 	their 	clients 	as 	compared 	to
transaction brokers and their customers under K.S.A. 58-30,111, a provision of the
Brokerage Relationships in Real Estate Transactions Act (BRRETA).
Statutory agents are real estate licensees who have an agency relationship with their
clients and as such owe their clients certain fiduciary duties. 1 The duties of seller’s
agents are specified in K.S.A. 58-30,106, while the duties of buyer’s agents are
specified in K.S.A. 58-30,107. 	A transaction broker, on the other hand, is a licensee
“who assists one or more parties with a real estate transaction without being an agent or
advocate for the interests of any party to such transaction.” 2 As one commentator puts
1 K.S.A. 2013 Supp. 58-30,102(s).
2 K.S.A. 2013 Supp. 58-30,102(u).

Sherry Diel
Page 2
it, “[t]he best one-word definition of transaction brokerage is, ‘facilitator.’”3 Because no
agency relationship exists between a transaction broker and a customer, transaction
brokers 	do 	not 	have 	the 	same 	fiduciary 	duties 	as 	buyer’s 	and 	seller’s 	agents. 4
However, transaction brokers have the same legal duty as statutory agents to disclose
adverse material facts actually known by the licensee to third parties.5
Your question concerns K.S.A. 58-30,111, which provides:
(a) A client or customer shall not be liable for a misrepresentation or
omission by the client’s statutory agent or the transaction broker arising
out of the agency or transaction broker agreement unless the client or
customer knew of the misrepresentation or omission.
(b) A statutory agent or transaction broker shall not be liable for a
misrepresentation or omission by the agent's client or the transaction
broker’s 	customer 	arising 	out 	of 	the 	agency 	or 	transaction 	broker
agreement unless the licensee knew of the misrepresentation or omission.
(c) A statutory agent or transaction broker shall not be liable for an
innocent or negligent misrepresentation in information provided to the
seller or landlord or to the buyer or tenant if the licensee does not have
personal knowledge of the error, inaccuracy or omission that is the basis
for the claim of misrepresentation.
The Real Estate Commission interprets this statute as treating statutory agents the
same as transaction brokers. 	Others, however, have suggested that a statutory agent
assumes vicarious liability for the acts and omissions of a client while a transaction
broker does not. 	Noting that vicarious liability is a common law concept, you explain
that the Commission reads K.S.A. 58-30,111 as superseding the common law liability of
real estate licensees. 	Thus, your question turns on the relationship between BRRETA
and the common law.
The Kansas Supreme Court has consistently held that when a statute conflicts with the
common law, the statute controls. 6 This holding is based in part on K.S.A. 77-109,
which provides:
The common law as modified by constitutional and statutory law, judicial
decisions, and the conditions and wants of the people, shall remain in
force in aid of the General Statutes of this state; but the rule of the
common law, that statutes in derogation thereof shall be strictly construed,
3 Vernon L. Jarboe, Brokerage Relations in Real Estate Transaction Act, 68 J. Kan. Bar Ass’n 36, 43
(1999).
4 See K.S.A. 2013 Supp. 58-30,113.
5 Compare K.S.A. 2013 Supp. 58-30,113(b)(2)(F)-(G) with K.S.A. 58-30,106(d)(1) and K.S.A. 58-
30,107(d)(1).
6 See, e.g., Board of County Commissioners of Neosho County v. Central Air Conditioning Company, Inc.,
235 Kan. 977, 981 (1984).

Sherry Diel
Page 3
shall not be applicable to any general statute of this state, but all such
statutes shall be liberally construed to promote their object.
Given this background, we conclude that BRRETA supersedes the common law liability
of real estate licensees to the extent there is a conflict between the two, but only to that
extent.
The legislative history of BRRETA confirms this was the legislative intent. 	As originally
introduced, the bill that became BRRETA contained a section supplanting the common
law with respect to brokerage relationships, but this section was removed by the
Legislature. 7 When major changes to BRRETA were made in 1997, that bill also initially
contained a provision superseding the common law. Again, the Legislature deleted this
provision before passage. 8 The following explanation was placed in the minutes of the
Senate Judiciary Committee:
BRRETA is intended to modify the common law rules governing the
relationship 	between 	brokers 	or 	salespersons 	and 	their 	clients 	or
customers. BRRETA establishes a scheme of statutory agency to replace
Common Law rules. 	It is the intent that where BRRETA and Common
Law conflict, BRRETA will be applied, but where BRRETA is silent, the
Common Law is applied. 9
Turning to K.S.A. 58-30,111, we do not believe that this statute entirely supplants the
common law liability of real estate licensees as your letter suggests. 	The plain
language of subsections (b) and (c) cannot be interpreted as abolishing common law
liability and creating new causes of action against real estate licensees. 	Instead, we
read the phrases “shall not be liable . . . unless” in subsection (b) and “shall not be liable
. . . if” in subsection (c) as modifying and restricting common law liability rules.
Our 	conclusion 	is 	supported 	by 	the 	Kansas 	Supreme 	Court’s 	recent 	decision 	in
Stechschulte v. Jennings. 10 In Stechschulte, a home buyer brought a common law
cause of action for negligent misrepresentation against the seller’s real estate agent.
The agent argued that BRRETA abrogated this common law cause of action, but the
Kansas Supreme Court disagreed, holding:
BRRETA does not eliminate the possibility of a common-law cause of
action 	against 	a 	real 	estate 	agent 	or 	broker 	for 	negligent
misrepresentation. 	It merely requires evidence of the agent’s or broker’s
actual knowledge of an otherwise undisclosed adverse material fact about
the subject property.11
7 Minutes of the Senate Judiciary Committee (March 21, 1995).
8 Minutes of the House Judiciary Committee (February 24, 1997).
9 Minutes of the Senate Judiciary Committee (March 24, 1997).
10 297 Kan. 2 (2013).
11 Id. at 26.

Sherry Diel
Page 4
In 	other 	words, 	while 	BRRETA 	“protect[s] 	agents 	and 	brokers 	from 	common-law
liability,” it does not entirely supplant the common law in this area.12
Your letter refers specifically to common law vicarious liability. 	We are unaware of any
common law principle under which a real estate agent would be vicariously liable for the
acts or omission of a client. 	After all, vicarious liability is a doctrine under which a
principal is held liable for the acts of an agent, not vice versa. 13 And in the real estate
context, the client, not the real estate agent, is the principal. 	In any event, to whatever
extent (if any) a real estate licensee could have been held vicariously liable for the
actions of a client or customer at common law, K.S.A. 58-30,111 provides equal
protection from that liability for both statutory agents and transaction brokers. 	The
statute does not distinguish between transaction brokers and statutory agents, as you
indicate others have suggested. 	Under the plain language of K.S.A. 58-30,111(b) and
(c), both statutory agents and transaction brokers may be held liable only if they had
personal knowledge of a client’s or customer’s misrepresentations or omissions. This is
really a form of direct liability since liability is based on a failure to disclose adverse
material facts actually known by the licensee.
You also ask about subsection (a) of K.S.A. 58-30,111, which addresses the liability of
clients and customers for the misrepresentations or omissions of their agents and
transaction brokers. 	As with subsections (b) and (c) of the statue, we read this
provision as modifying or limiting the common law, not completely supplanting it or
creating a new cause of action. 	And like subsections (b) and (c), the protection
provided by subsection (a) is the same regardless of whether a statutory agent or
transaction broker is involved.
Sincerely,
Derek Schmidt
Attorney General
Dwight Carswell
Assistant Attorney General
DS:AA:DC:sb
12 Id. at 25-26 (“the legislature’s requirement of disclosure of actual knowledge of adverse information
merely limited the duty owed rather than destroying it altogether”).
13 See, e.g., Leiker v. Gafford, 245 Kan. 325, 355 (“Vicarious liability depends upon the relationship of the
parties, such as employer and employee or principal and agent. In such cases, the employer or principal
is held liable for the negligent act of the employee or agent solely by reason of the relationship and not
because the employer or principal actually committed an act of negligence.”), disapproved of on other
grounds by Martindale v. Tenny, 250 Kan 621 (1992).