Real estate brokers are held to high standards of care and their liability is increased with each agent they employ. When a broker is hired by a seller, he/she is agreeing to use good faith efforts to sell the real property in exchange for a commission. A listing agreement can be open, net, exclusive agency, or exclusive right to sell.
Brokers are exposed to liability in a number of different ways during a real estate transaction. Real estate brokers are under a general duty to supervise their agents and may be liable for any of their actions. This liability can include non-disclosure by the agent or the broker, misrepresentation, breach of duty, or inadequate record-keeping. Unfortunately when a real estate transaction goes wrong, the broker and real estate agent are usually the targets of a lawsuit.
There are a number of defenses available to brokers. First, having proper policies and procedures in place before a problem arises can help to reduce liability. By working with a real estate attorney, a broker can review internal procedures and ensure compliance. A proactive approach is always the cheapest and easiest. If a problem has already arisen, a real estate attorney can provide guidance and counsel.
By utilizing a real estate attorney, a broker can ensure that he/she is in compliance with federal and state regulations or dispute any issues that arise. Call Skinner Law Group today at (480) 422-3440 to schedule your real estate consultation.