June 20, 2016
Real estate vendors and purchasers have high expectations of their realtors – and they don’t often hesitate to pursue legal action against their realtor when something unexpected happens. And while realtors must have errors and omissions insurance that covers many of these claims, more claims means higher premiums, so both realtors and their insurers have a stake in managing risk of litigation against realtors.
Obtaining and communicating information is one of the realtor’s key objectives because it allows the realtor to protect her client’s interests. But while there are many sources of litigation between vendors or purchasers and their realtors, claims against realtors by their clients generally arise from a gap in that information: a vendor or purchaser alleges that the realtor failed to communicate known information, to ascertain information, to make further recommendations or warnings based on information or communicated false information. The legal basis for these claims is typically negligence (including negligent misrepresentation or misstatement), breach of contract or fraud (when the realtor allegedly withholds or conceals information for her personal gain).
It’s impossible to prevent a disgruntled vendor/purchaser from filing a claim against a realtor. And while what the law requires a realtor to do in any particular case will depend on the specific circumstances, there are some general steps that realtors can take to manage – and minimize – the risk of being sued. Here are 10 practical tips to help realtors minimize their litigation risk.
Please contact your McInnes Cooper lawyer or any member of our McInnes Cooper Insurance Team to discuss this topic or any other legal issue.
McInnes Cooper has prepared this document for information only; it is not intended to be legal advice. You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.
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