Real estate agents’ reputation and careers may be at stake when facing litigation or grievance. Consulting an attorney is essential in understanding if their legal claim stands up and in helping navigate through the legal system efficiently.
Agents should conduct themselves responsibly and be open with their clients about any misrepresentations of facts; any deceitfulness could result in a breach of duty lawsuit.
Misrepresentation
As you purchase property, you rely on real estate agents for all the important details. They have a fiduciary duty to represent you fairly and honestly; should they mislead with false information, you have every right to sue for damages – such as negligence, intentionality and material misrepresentation.
Intentional misrepresentation is one of the most serious types of fraud. This occurs when brokers provide false statements with the intention of leading the buyer into making a purchase decision that is contrary to reality, either through outright lies or reckless statements that lack certainty of facts. Therefore it’s essential that an exclusive buyer’s agent represent your interests throughout your transaction and remain honest when discussing defects and other issues which could influence their decision to buy a property.
Negligent misrepresentation may not have the same devastating consequences, but it still could have serious ramifications on you. This type of claim focuses on any unintentional omission or misrepresentation of facts which would have altered your decision-making process in purchasing the property – for instance if an agent knew about termites but failed to tell you, you could file suit against them under negligence claims.
Real estate agents frequently exaggerate a property’s strengths while downplaying any weaknesses, but there’s a fine line between selling techniques and outright misrepresentation. If an agent makes false statements about a property they’re advertising for sale, they could potentially face fraud charges and be sued accordingly.
Innocent misrepresentation is more challenging to demonstrate than intentional or negligent misrepresentation, since it occurs when a real estate agent makes a false statement while having reasonable belief it is accurate based on information from either their MLS account, other sources, or even personal experience. Unfortunately, innocent misrepresentation could still cost you money if it leads to poor decisions being made regarding purchases made under its influence.
Negligence
As with any profession, real estate agents must uphold a standard of care that protects clients financially from breaches in this duty and any financial losses as a result. Unfortunately, negligence among real estate agents is more frequent than many may realize, and can happen in various forms; here are some examples:
Failing to disclose key property information. Real estate agents must disclose anything that could significantly decrease the value of a property, such as leaky roof or asbestos presence, to their client(s). They could be held liable if their clients’ personal data such as Social Security numbers and bank details aren’t protected from unwarranted exposure.
Misleading buyers or tenants about a property. This may involve making false statements regarding its condition, location or features. Real estate agents must always act honestly with buyers or tenants and may face liability for negligence if they fail to do so.
Real estate agents should take all reasonable measures to prevent damage to client properties. Real estate agents must conduct thorough property inspections prior to sales and make repairs as needed in order to make sure buyers or tenants can safely enter and view properties without fear of injury from viewing them. Any agent failing to do this could face negligence charges should someone become injured during viewings of a listing.
Real estate agents may be found negligent if their inaccurate or misleading advice causes financial losses for clients. This includes providing wrong information regarding features, conditions or history.
Consequential damages. These awards provide compensation for injuries not directly related to money, such as stress or reputational damage. Real estate agents may receive consequential damages awards if their actions or inactions cause you to lose money or miss out on an advantageous deal.
Rescission of Contract. This remedy allows you to cancel your agreement with a real estate agent if they have breached their duty and caused you harm.
Professional negligence is a serious matter, so having an experienced lawyer on your side is absolutely essential. An attorney can advise on possible causes of action against a real estate agent and guide the process of filing suit against them. Contact Surasky Law today to find out how we can assist with bringing a negligent conduct claim against them.
Fraud
At times, real estate agent misrepresentations can reach the level of fraud. When this occurs, victims can file suit to recover both punitive damages as well as compensation for their losses. Fraud is more serious than negligence or innocent misrepresentation and requires substantial proof to establish. A NYC real estate attorney can help determine whether you have a valid fraud claim and assist with gathering evidence in support of it.
Fraudulent behavior on the part of real estate agents often includes providing false or incomplete information or withholding material facts from another party involved in a transaction, according to Attorney Christopher Coble. Common examples of real estate fraud may involve failing to disclose property defects that would lower prices or earn higher commissions, as well as keeping crucial financial documents like mortgage documents, loan applications and credit reports from being revealed during negotiations, among other tactics used by fraudulent real estate agents.
In such cases, an agent could also be charged with theft under false pretenses or breach of fiduciary duty by their client, who alleges they lied about quality or safety issues of property before suddenly withdrawing without informing him/her of this development.
Fraud occurs when an agent recklessly makes false statements to cause damage to another party, for example by falsely reporting a property was recently checked for pests when in reality none such inspection was ever performed.
Real estate agents usually work on behalf of brokers or brokerage companies and may be held liable for both their supervisors’ actions as well as those of individual agents hired. This arrangement, known as agency relationships, gives clients the right to know that each agent they hire is following directions from their superior without engaging in fraudulent activity themselves.
An Ohio couple sued both the bank that owned their foreclosed house and the real estate agent who sold it sight unseen when they discovered problems including mold growth and less lake frontage than advertised in its listing. They claimed both parties committed fraudulent misrepresentation by concealing such facts from them, leading them to lose out on potential investment opportunities as a result of this conduct.
Damages
Real estate agents face the constant risk of legal actions being brought against them as part of their profession. While you cannot completely eliminate your exposure, steps should be taken to minimize it; be honest and open with clients, document all interactions during the transaction process, and obtain appropriate E&O insurance coverage.
Most lawsuits against real estate professionals stem from failure to disclose information that could have an effect on a property’s value and appeal; such conduct constitutes a breach of duty on their part and may lead to significant monetary damages.
Plaintiffs suing real estate agents for misrepresentation or negligence can seek various forms of damages; financial compensation for injuries sustained as a result of their actions being given priority over other forms of relief.
Damages for breach of contract by real estate agents depend on whether or not evidence can demonstrate that they breached their duties, resulting in harm or loss for the claimant. A qualified lawyer can help assess a client’s potential claims as well as gather supporting documentation to support these.
Alternative dispute resolution (ADR), such as negotiation and mediation, may also help parties avoid litigation by being more efficient and cost-effective than litigation, while also maintaining relationships and often leading to settlement agreements.
Before filing suit against a real estate agent, it’s essential to carefully consider its potential benefits against their potential costs in a civil proceeding. Sometimes it may be more cost-effective and beneficial for your business to walk away rather than enter an expensive and time-consuming legal battle.
Experienced real estate and malpractice suit attorneys can be invaluable resources in protecting against client lawsuits and legal complications, from being transparent in client dealings to keeping detailed records and keeping E&O coverage. In the event that a legal dispute does arise, these specialists can also defend you and help secure maximum monetary compensation for losses sustained in legal battles.