How agents avoid ending up in court

by John Tenpenny28 Aug 2015
Be prepared. It may be the motto for the Boy Scouts, but it should also be the mindset of agents who don’t want to be on the receiving end of a lawsuit.

With myriad details to look after and multiple clients and properties, it’s all too easy for things to slip through the cracks, which can make agents vulnerable when it comes to getting sued.

The news is filled with stories of real estate agents being sued for various reasons and while agents can’t prevent frivolous claims, they should be prepared and educate themselves about potential legal issues that could be problematic, such as failing to disclose a property defect, breach of duty, giving legal advice and misleading clients.

One of the most common reasons agents get sued is when clients blame them for defects they find with the property after signing the papers. Defects can include construction issues, improvements without permits, leaks, cracking, noise or nuisances.

Most real-estate laws dictate that a selling agent tell a prospective buyer everything that could possibly raise concerns, but the wording is vague and it’s unclear just how deep the selling agent needs to delve in order to protect themselves from lawsuits if something goes wrong.

Be sure agents should have a thorough inspection of the property done, and have their clients sign a statement that documents their awareness of any issues.

Another common reason agents are sued is for breach of duty. Real estate agents know they must always act in the best interest of the client, as clients place a special trust in real estate agents for their expertise.

Since they are held to a high standard of honesty and full disclosure, agents should always document everything. Don’t leave any detail to chance and always make sure it’s in writing.
 

COMMENTS

  • by Lynda 8/28/2015 11:01:03 AM

    The client must read their listing agreement very carefully. Given that the listing agent expects to have a key to the property and use a "lock box", one must ensure that the agent is responsible for those other agents given the key (through use of a "lock box") because some listing agreements state that the listing realtor is not responsible for any damage done to the property!

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