How and Why Real Estate Agents Get Sued

I just read a very informative and eye-opening article from Inman News about the ten most common ways that agents go wrong and end up getting sued.  It's not always something intentional, in fact, it's mostly unintentional. And that's why we need to be so vigilant in understanding our roles and how we can overstep them.

There are many facets to a real estate deal that we must juggle - legal contracts, advice to sellers or buyers, inspection issues, negotiating, promises made, or just about anything else in the process.  Newer agents are particularly vulnerable to mistakes, but anyone can make them in good faith.  The key to getting it right is to be educated and prepared.

Here are the ten most common ways agents can get sued:

1. Failing to disclose a property defect.  We can get blamed for this even though we probably didn't have any idea there was a problem.
   
   
2. Breach of duty.  Sounds vague but it pertains to a myriad of issues where someone feels we didn't act in their best interests.
   
   
3. Representing clients in unfamiliar territory.  I've always wondered why agents travel so far afield of their local community to sell real estate.  Well, I actually do know why and it's not a good reason. Surely a good agent can be found to refer the business to - why risk getting sued because you've made a fatal error, in say, which school district the house is located.  This happened to a fellow agent who told her buyers the house was located in "X" school and upon closing, moving in, and registering their kids for school, the buyers discovered they were actually in "Y" school district.  Lawsuit followed.
   
   
4. Giving legal advice.  Both the purchase and listing contracts are legal documents that we fill out on our client's behalf.  We know what we know and should stick to it.  Everything else is for attorneys to work out (in Winnetka and the North Shore communities attorneys are hired to approve contracts.)
   
   
5. Misleading clients.  This sounds intentional and refers to exaggerated claims about a house.  Be truthful in advertising and double check factual information.
   
   
6. Breach of contract.  When a client feels we didn't adhere to the terms of the contract, particularly as it relates to time frames.  We should be very familiar with the contracts we write and keep up with yearly changes and updates.
   
   
7. Failing to keep your clients' data safe.  If any of their private infomation gets hacked, the agent could be vulnerable to a lawsuit.  
   
   
8. Failing to recommend inspections.  Apparently, there are agents who don't bother with this vital step of the process.  And if their clients are not savvy, they might not understand the importance of an inspection.
   
   
9. Negligence.  As the article states, agents ". . . don't always know what (they) should have known."  In other words, mistakes happen and we could be liable. 
   
   
10. Bodily injury.  Listing agents need to be aware of anything that could cause injury at their listings. Snow should be shoveled, leaves picked up, wires moved out of the way, and junk moved out.  Even problems resulting from mold could result in a lawsuit.

Be very careful in what you say, disclose, reveal, advise, or advertise.  Buyers and sellers rely and look to us for answers and solutions and we can do a superb job for them without getting into legal trouble.  It just takes being aware of the pitfalls and educated about the solutions.  

To read the entire article, please see:

10 Most Common Ways Real Estate Agents Get Sued