Most states require agents to take continuing education. In Pennsylvaniawe must take 14 hrs every 2 years.One of the courses I took was on Riskmanagement. Here is some valuable information we went over which varies from state to state.
Licensees are most apt to incur legal liability for misrepresenting material facts regarding the condition of the subject property.In most states"Caveat Emptor"( Buyer Beware")no longer applies to real estate transactions.Instead it is the licensee who bears the responsibility for making disclosure of all material facts of which he or she has knowledge of..
InterestingMisrepresentation Claims
Home advertised as having hardwood floors when in fact they were per-go floors.
Buyers bought a home with the understanding that the house had vinyl siding ;actually it had aluminum siding.
Buyers purchased a property with a faulty furnace;after 3 of the 4 family members died from carbon monoxide poisoning,the listing agent was sued for failure to disclose the furnace problem and for not recommending an inspection.
These are just a few misrepresentation claims there are many more.
There were many court case that we went over and discussed. The best advise was to keep good records and files. Also to log phone calls and other conversations. Most important communicate with your clients .Even when the sale is over. If there is a problem try to mediate it . Most misrepresentation Claims result from lack of communication , misunderstandings.and frustrations..
Practice Risk Management
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Hannah, I wonder what it is in NY and I'm surprised it's not "Let the Buyer Beware" in PA. Some of the things you might have no way of knowing and can make an honest mistake....
Jeff..My class was almost empty compared to the Short Sale Class..That was packed..I think it is important too.. There was a whole section on Puffing too..Good to see you back ..:0)
Carole..No honest mistakes it is your duty to perform due diligence and competent investigation would disclose..(ignorance of the law is no excuse).....:0)
Hannah, I can understand a mistake when posting a listing, easy to check the wrong box. But getting to a home to see it, then looking at the siding or the flooring and realizing, oh, that isn't right, how does that translate to a law suit? Of course if it was more than choosing the wrong description, if it was in the written description, shame on the agent. This is just sloppy work. And frivolous law suits for pergo vs. hardwood, aluminum vs. vinyl. Sorry, but those are not life altering things, or things that you can't discover on your own. That is just my 2 cents on that!
However, if the agent does know pertinent material facts and does not disclose, not a good thing. Was the agent aware that the furnace was malfunctioning?
And how irresponsible of an agent not to suggest a building inspection.
I have to say that I agree with Andrea, the furnace situation is tragic and I understand that outcome, however vinyl vs alum, and hardwood vs pergo, that's spitting hairs don't you think? Sounds to me like frivilous lawsuits and that is exactly what is causing such a problem with rising E&O insurance.
It kinda makes me angry that such lawsuits were even heard in a court.
Andrea..We live in a consumer generated society and home buyers increasingly are seeking to hold real estate people as guarantors of the transactions.That is why I always try to dot my "i" and cross my "t" you never know when you may have to defend yourself in court...that is also why we have errors and omissions insurance ..it was also suggested that we read our policy to see just what is covered..
Have you ever read yours???
Gerry..Anyone can file a lawsuit...risk management is training to prevent and minimize lawsuits..
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Hannah - sounds like an informative, and IMPORTANT, session. Mispresentation seems to be a widespread problem, at least from my perspective.
Jeff