reputation or career.
It is important to avoid legal risks to prevent litigation and the consequences of the negative impact that these complications cause to the individual professional. Real estate brokers may face a number of problems with clients if the buyer or seller has a falling out with the other party. It is often easier to blame the broker because he or she has a greater involvement in the dealing than either of them do normally. However, there are several common issues that real estate brokers and agents could avoid or prepare for that could lead to litigation.
Disclosures with a Property
Defects in a property require disclosure. The seller must disclose these details. However, if the seller uses a real estate broker as an intermediary, it is then the responsibility of the broker to ensure that the buyer is aware of any and all necessary defects in which the state requires disclosure. Failure to comply could lead to legal complications and litigation against the broker if the buyer must pay for the problem or suffers injury from a defective item or issue. All damage and defects should go through a professional to survey and assess for recording and documenting the matter for future needs.
The Breach of Duty
Professionals owe a duty to the clients they represent. This is similar to contract disputes and the duty of care that medical professionals owe to patients. The real estate broker enters into a specialized agreement with the clients and must put the best interests of the buyer or seller to the front. There is a certain type of trust that the client must place in the broker and violating this trust could lead to litigation in a breach of duty. The broker must remain honest and give full disclosure. Acting against the best interests is similar to negligence or could incur intentional actions to harm the client.
Representation of the Client
It is essential that a broker research any property or location he or she is unfamiliar with to ensure the best representation of the client. The professional must take the necessary precautions to ensure the selling and buying of property is legitimate without further harm to the person the broker represents. IF there are certain requirements, this could lead to a failure to sell or buy appropriately. Other situations may involve certain problems that the client could encounter such as a Homeowners Association, certain rules and guidelines of the community. Without taking the proper care, the broker could face legal claims against him or her.
The Giving of Legal Advice
While many professionals want to help clients with any number of problems, it is important to refrain from engaging in activity of another licensed professional. Providing and giving legal advice is normally a crime for anyone other than a lawyer or someone in a legal profession. It is illegal in most states to act as a tax expert or lawyer if the person is not part of this line of work. While taxes and legal matters are still a part of real estate, the broker should not give such advice or details without consulting the proper professional.
Misleading Clients and Breach of Contract
The broker may mislead any of his or her clients through exaggerations with the features and conditions of the property. This is a deception that could lead to serious consequences if the client suffers from the disclosure. Misled clients may sue the broker after discovering the truth. Another legal claim that may occur is the breach of contract. Nonperformance in accordance with the contract could lead to a legal claim against the professional. The most common issues are the time frame failure in compliance. Others may include negligence, breach of duty and fraud.
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