June 3, 2021
As one can imagine, the Firm gets lots of calls relating to agent “liability.” Today we discuss the tort of negligence as it applies to real estate agents. This topic is a full semester in law school, so we are just going to hit some highlights.
As one can imagine, the Firm gets lots of calls relating to agent “liability.” Today we discuss the tort of negligence as it applies to real estate agents. This topic is a full semester in law school, so we are just going to hit some highlights.
There are four elements that must be proven in order to find negligence. They are: duty, breach, causation, and damages. There must be a legal duty or obligation the agent has to their client, the parties, or the public. The agent must then act in a manner that falls below the standard of care. This act, or failure to act, must be a substantial cause of monetary harm or damage – a financial issue.
Duties are imposed by statute, regulation, ethical obligations, case law, and common practice. For example, doing a reasonably competent diligent visual inspection of accessible areas of a residential property (1-4) and disclosing what is discovered in writing is a duty imposed by Statute in California Civil Code, Section 2079(a). Doing a poor job below the standards set by common practice in the area or improperly filling out an AVID form most agents use can create “liability” which is defined as the “state of being responsible for something.”
Since there are so many possible duties, and so many opinions on what creates this “liability,” it is important to understand there are risks inherent with the job of a real estate agent but there are methods to manage the risk. If an agent acts in a manner that ignores the client’s best interest in order to promote their own profit, odds are there will be little that can be done to protect that agent. Failing to cooperate with other agents, failing to advise the Seller of offers, or failing to disclose known or discovered defects are ways to potentially create serious liability.
The following are some tips to avoid some of the pitfalls in discharging duties. It is one man’s opinion, not complete by any means, and is merely meant to highlight some areas where you can help yourself.
There are hundreds of tips. These are just a few. Above all SLOW DOWN. Give yourself time to think, act, and communicate. Give your clients time to digest the information and ask questions.
September 28, 2023
Record Retention Requirements for California Real Estate BrokersGuidelines on record retention for California real estate brokers, detailing document types, retention duration, and best practices for record management and disposal.
July 31, 2023
Resolving Co-Ownership Disputes: Unveiling the Uniform Partition of Heirs Property ActIf you own Heirs Property or are contemplating estate planning involving co-ownership, this article explores the Act's impact and the benefits it offers in fostering smoother co-ownership experiences.
June 30, 2023
Important Updates to California Association of REALTORS® Forms: June 2023 EditionStay informed about the latest changes in California Real Estate Law. Discover the important updates to various forms that will impact professionals and clients alike. Find out what modifications have been made and how they may affect your real estate transactions.