‘Imputed knowledge means the knowledge attributed to a party because of his/her position, or his/her relationship with or responsibility for another party. Such knowledge is attributed for the reason that the facts in issue were open to discovery and it was that person’s duty to apprise him/her of such facts. For instance, if the stairway leading to a rental house is defective and if any person is injured on the stairway, the house owner cannot evade liability for such person’s injury by denying knowledge of the defect. Reason being that the house owner is subject to a duty to discover and rectify the defect in an area known to be used by the public. Hence, knowledge of the defect is imputed to the house owner.”

Real Estate Principal Brokers know this dynamic well. This is a heavy (perhaps the most heavy) burden because the Principal Broker, through imputed knowledge, is considered to know EVERYTHING about EVERY client represented by EVERY affiliate Sales Agent. That is scary, indeed. We do take some solace in the possibility of Designated Agency which significantly reduces liability (exposure), but not all. The “charge” of all Principals is to Educate and Supervise all affiliates sufficiently to meet the standard of care required through the creation of an agency relationship. (Client/Professional)

“Designated agency establishes an agency relationship between only one real estate licensee in the office (to the exclusion of everyone else in the office, including the managing broker) and a buyer or seller.”

That was a long (and necessary) preamble to a simple concept.

Woe be unto the Professional who assumes the client has imputed knowledge of the process . . . That’s NOT how this works . . . It’s reverse thinking . . . Gibberish . . . HERESY!

The professional MUST consider each and every client to be mentally devoid of the process of the transaction and follow this process consistently for all, thereby releasing the “distraction” of having to learn the steps of a process they only do once every several years.

Whenever there is a Client:Professional relationship, the client relies on the professional to protect him from any latent, procedural harm that may lurk. We trust that the professional knows what she’s doing and will lead us by the hand through every step of the process . . . We depend on her to “execute the process” according to a high standard of care. She knows the time deadlines and the appropriate forms and nuances of the transaction, and pay her well to keep us on track for successful, timely, and happy completion.

The responsibility of the client is simple:

• Be attentive to the requests of the professional, and take appropriate action in a timely way.
• Pay attention to the details and always ask for clarification needed for understanding
• Focus on the important decisions and make them in good faith

As a Principal and owner of an active Real Estate Sales Firm Pareto Realty, These are the things that can “keep me up at night.” I, and most Principal Brokers, invest countless hours working with our Affiliate Broker Agents to be as certain as we can that all of our clients have the solid representation they deserve.

Do things right, and imputed knowledge is a lot less scary!

PS . . . This post applies to ALL Professionals (I just had a very frustrating experience with a Health Insurance Agent who did not do all of the above well – Unnecessary aggravation and derailment of what was an otherwise smooth Friday . . . It took me about an hour and half to clean up the mess that never would have happened had that agent read this post before . . . Ah yes . . . So that makes all of this MY fault because I hadn’t published this post – Shame on me!