Legal Question in Real Estate Law in California

Re: can she lose her license

Whether the agent's participation in your deal was proper or not is largely a question of disclosure and fair and above-board dealing.

Agents and brokers are not categorically forbidden to do deals with clients who are not real-estate licensees. They do, however, have a duty to disclose the fact that they are licensed.

Furthermore, it is important to distinguish between situations where the license holder is acting as your agent or broker, where a higher duty is owed you, and situations where they are acting as your partners or co-principals, in which situation they can wheel and deal along with you, and so long as all the facts are disclosed, there is no special fiduciary broker-client duty, but only the ordinary duty of partners (your term) to be loyal and fair to one another. In other words, your agent partner and you are both treated as equals, whereas in an agent-client or broker-client relationship there is a higher duty to look out for the client.

So, I think what you were told is incorrect, but that does not mean your agent-partner has treated you honestly in all respects, either. In dealing with property as valuable as a duplex, you should not be shy about spending a few hundred bucks to retain a real estate lawyer to look at the specific details here and advise you if you've been cheated or not.

I would add that getting into any kind of deal with anyone which might be treated as a "partnership" is scary because of the liability and other issues that go along with true partnerships, and no one should form a relationship that might be a partnership without (a) legal advice, and (b) a well-written agreement.

Re: can she lose her license

Not without full disclosure you can't.