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Release of Liability

Release of Liability for Commercial Real Estate Brokers in California

Secure your California CRE brokerage against misrepresentation and commission claims. Professional Release of Liability compliant with Cal. Civ. Code § 1550.

By The PaperForge Editorial Team·Last updated February 28, 2026
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In the high-stakes California commercial market, brokers face significant exposure to litigation regarding Triple Net (NNN) lease complexities, CAM charge discrepancies, and misrepresentation claims.... Read more

Why You Need This Release of Liability

In the high-stakes California commercial market, brokers face significant exposure to litigation regarding Triple Net (NNN) lease complexities, CAM charge discrepancies, and misrepresentation claims. Under California Civil Code § 1550 and § 1624, a written release is vital to define lawful consideration and the full scope of a liability waiver. This document helps mitigate risks associated with Tenant Improvement allowances and Letter of Intent (LOI) ambiguities, ensuring that after a deal closes or a relationship terminates, your commission and professional reputation remain protected from retrospective disputes.

Liability Waiver & Risk Allocation

What This Release Covers

Beyond the standard release of liability sections, this template adds fields specific to Commercial Real Estate Broker:

+Settlement or Consideration Amount(Payment & Consideration)
+Nature of Real Estate Transaction(Scope of Release)
+Specific Exclusions or CAM Charge Carve-outs(Scope of Release)
+Client (Releasor) Email Address(Parties)

The core legal purpose of a Release of Liability is to protect one party (the Releasee) from legal claims or lawsuits from another party (the Releasor) related to the subject of the release, such as an activity, transaction, or event.

Liability Risks This Release Addresses

Lease liability issues

Including precise language in leases regarding responsibilities for maintenance, repairs, and liabilities to avoid disputes.

Misrepresentation claims

Detailed disclaimers in contracts stating that all representations are believed to be accurate but should be independently verified by clients.

Waiver Law in California

Cal. Civ. Code § 1624 — California's Statute of Frauds requires certain contracts to be in writing, such as those for the sale of goods over $500, and contracts that cannot be completed within one year. This statute mirrors the UCC but differs in certain contexts, such as real estate transactions.
Cal. Civ. Code § 1550 — California requires parties to a contract to have both the capacity to contract and that there must be lawful consideration. The Code highlights certain scenarios that might not traditionally meet these elements under common law.

What Makes a Liability Release Enforceable

For this release of liability to be legally valid:

  • +Signatures of all parties involved to demonstrate their consent and understanding of the release terms.
  • +Consideration, either in the form of payment, service opportunity, or other value exchanged, although this depends on state law.
  • +Proper identification and description of the activity, event, or relationship to which the release pertains.
  • +Age of majority confirmation, ensuring all parties are legally capable of entering into the agreement (usually 18 or older).

Common mistakes to avoid:

  • !Failing to clearly define the scope of the release, leading to ambiguity about what claims are covered.
  • !Omitting language that discusses the Releasor's acknowledgment of risks involved, which can lead to disputes about assumption of risk.
  • !Not specifying governing law, which can result in jurisdictional disputes if enforcement becomes necessary.
  • !Including broad, unenforceable language that unintentionally waives rights beyond what is intended, potentially voiding the agreement.
  • !Neglecting to properly identify the parties, rendering the release confusing and possibly unenforceable.

Frequently Asked Questions

01

How does California Civil Code Section 1542 affect my broker release?

In California, a general release does not typically extend to claims that the Releasor does not know or suspect to exist. To be fully protected against future commission disputes or lease liability, your release must specifically include a waiver of California Civil Code § 1542 rights, acknowledging that the client is intentionally releasing even unknown claims.

02

Does this release cover misrepresentations regarding CAP rates or Triple Net (NNN) expenses?

Yes, provided the Release Clause explicitly identifies these areas. Given that misrepresentation is a common liability, the document includes language stating that the client has performed independent due diligence and releases the broker from claims related to the accuracy of financial projections or CAM charge estimates.

03

How does AB 5 impact my liability release if I use sub-agents?

Since California's AB 5 (Cal. Lab. Code § 2750.3) uses the ABC test for worker classification, it is critical that your release identifies the correct legal relationship. If you are releasing liability involving independent contractors or sub-brokers, ensuring the document aligns with California Labor Code requirements prevents misclassification claims from being excluded from the release's scope.

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