A real estate agent is a licensed professional who is authorized to conduct business in a given state. As such, real estate agents are responsible for many different tasks depending on their education, licensing, and certifications. The most common tasks a real estate agent is responsible for include:
- Handling standard client forms;
- Drafting and preparing offers and other related paperwork;
- Providing satisfactory customer service if a client has an issue;
- Answering basic questions that clients may have, such as explaining the home purchasing/selling process;
- Reviewing real estate contracts, such as lease agreements, purchase agreements, and rental contracts;
- Negotiating sale prices between sellers and the clients;
- Closing any deals;
- Showcasing properties to potential buyers; and
- Guiding clients through tours of the property.
Not only are real estate agents required to do certain tasks, but they are also restrained from partaking in other actions including:
- Giving legal advice (unless they are a licensed attorney and are acting in the capacity as your attorney), as this would be considered an authorized practice of law;
- Giving tax advice, as they are not licensed to do so; or
- Violating the Fair Housing Act, such as disclosing certain details about a neighborhood or community that are protected by the Act.
While real estate agents are subject to numerous legal claims, the majority of these legal claims occur because they failed to do one of their required responsibilities or because they acted in a way that is restricted. Below are the 10 most commons reasons why a real estate agent is sued.
10 Common Causes of Real Estate Agent Law Suits
Though accidents can happen, knowing the most common real estate agent mistakes can help you understand when you may encounter legal issues. The most common real estate agent issues include but are not limited to:
- Failing to Disclose a Property Defect: The most common types of hidden defects include construction issues, leaks, cracking, noise, or improvements without permits. If you feel your real estate agent was keeping any of the aforementioned issues from you, you must prove that the agent knew or should have known about the defects.
- Breach of Duty: Real estate agents must act in the best interest of their client—not the property seller or another third party. Further, these entities are legally required to keep sensitive client information such as financial details private. Not only do real estate agents and realtors have to keep sensitive client information secret, but they must also disclose any information about a property or seller that may benefit their client.
- Representing Clients in an Unfamiliar Territory: Different states—and areas within specific states—have their own real estate rules and regulations. Thus, if your real estate agent is just learning these rules and they tell you incorrect information, you may be able to receive monetary damages.
- Giving Legal Advice: Most real estate agents want to help their clients. However, a real estate agent is prohibited from providing any type of legal advice.
- Misleading Clients: As mentioned in the breach of duty section, real estate agents must prioritize the needs of their actual clients. Thus, if your real estate agent misleads you before, during, or after you purchase, sell, lease, or renovate a property, you will be able to sue them.
- Breach of Contract: Commonly, a real estate agent’s breach of contract occurs when the agent does not comply with the timeline stated in the initial agreement. However, negligence, fraud, or breach of duty can all lead to a breach of contract lawsuit.
- Failing to Keep Clients Data Safe: Real estate agents must keep sensitive client information such as financial details private. This is true whether they are protecting the information from third parties involved in a real estate transaction or hackers. In either case, if a real estate agent does not protect your sensitive information, you have the legal right to seek compensation.
- Failing to Recommend Inspections: One of the most common causes of real estate agent litigation occurs because an agent fails to recommend a property inspection. While people rely on their real estate agents for a lot of information and guidance, a third-party inspection is almost always a good idea.
- Negligence: Negligence is a cause of action alleging the failure to exercise due care toward others that a reasonable or prudent person would do in the circumstances. Clients can make claims that a real estate agent should have known something but did not and failed to take appropriate action.
- Bodily Injury: If you are injured during a property showing or after purchasing a house and this injury was caused by your real estate agent, you will be able to seek compensation for any costs related to the accident.
What Remedies are Available If You Sue a Real Estate Agent
In most real estate agent lawsuits, a court will award the plaintiff—the person suing the real estate agent—monetary damages. These awards typically include but are not limited to:
- Compensatory Damages: Compensatory damages are most commonly used in cases of breach of contract or misrepresentation. However, you may be able to secure additional punitive monetary damages in cases of fraudulent misrepresentation.
- Remedies in Equity: Remedies in equity are damages that require the real estate agent to cancel the contract they breached.
- Other Damages: In certain instances, you may be able to receive damages stemming from emotional distress or other injuries stemming from the actions of the real estate agent.
It is important to collect all documents showing the damages you have suffered before suing your real estate agent. However, you should also try to mitigate your damages by not putting yourself in additional harm and then try to recover the additional harm you suffered.
Do You Need a Real Estate Attorney to Sue a Real Estate Agent
Most people go into a real estate transaction hoping and expecting it to go smoothly with no conflicts or disputes. However, despite many people’s intentions, there are certain issues that occur during a real estate transaction that warrant real estate litigation. If you are currently dealing with real estate litigation or believe you will soon be entangled in a lawsuit concerning real estate, you should contact a real estate attorney immediately. A real estate attorney can help you receive the outcome you desire. However, they can also help you understand the unique issues you are dealing with.
Contact Our DC Law Office for More Information
Finally, for more information on what to do if you have a problem with your real estate agent, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys. Additionally, for general information regarding real estate law, check out our blog.