All those licensed as a real estate agent must abide by strict legal requirements. When and how these requirements apply depends on state law. However, there are some overarching similarities to all the laws governing real estate agents. Here, we’ll briefly explain the duties an agent owes to a client and how legal liability may arise.
The Fiduciary Duty
Real estate agents and brokers owe a fiduciary duty those they represent. This requires them to consider the best interests of their client when dealing in real estate transactions. One common component of fiduciary duty is confidentiality. An agent may not reveal private information that will hurt their clients’ bargaining position. The duty also includes an obligation to maintain an accurate accounting of funds used in the transaction. Additionally, agents must act with reasonable care when representing a client and are required to remain loyal to their client’s interests.
Clients who are subjected to a breach of the fiduciary duty may have several remedies. First, the client may file a lawsuit against the realtor to seek money damages. A court might also require the realtor to forfeit his or her commission in an unfair transaction. Finally, a real estate contract may be cancelled through a process called rescission.
Unauthorized Legal Advice
Realtors tend to be very knowledgeable about property law. However, in some cases they may make the mistake of venturing into the territory of a real estate lawyer. Real estate agents and broker alike are prohibited from giving legal advice in practically every jurisdiction. This rule seeks to prevent harm to the client by discouraging advice by someone who is not formally trained in law. When an agent crosses the line and gives legal advice they may be liable for any damage caused by their inaccurate representations.
It almost goes without saying that real estate agents are liable for engaging in fraud. While they may be criminally liable for such acts there are also causes of action available in civil law. The legal definition of fraud is an intentional act that misrepresents or conceals a fact that a client relies on to their detriment. Thus, agents who misrepresent an important detail about the transaction can be sued for fraud. Real estate professionals can also be sued for lying about their licensing status or for falsifying information a deed or legal document. It also important to look out for shady foreclosure assistance programs that might actually take advantage of unsuspecting clients.
Suing Real Estate Professionals
If you have been subjected to unprofessional behavior by a real estate professional, contact Rex B Bushman for help today.