For Real Estate Agents
Real estate agents play a major role in the purchasing and selling of property because they have a more thorough understanding of the different aspects of real estate transactions. Because of the complexity of real estate law, every sale will put them at risk of possible legal action. They can be sued by both the buyer and the seller, and there can be a number of reasons why.

Chicago Real Estate Agents Service
Agents can be sued because they did not fully disclose the property’s actual condition, or they could be sued because they did not fulfill a certain “fiduciary duty.” It could also be because a person feels as if they have been discriminated against.
People in this day and age are more apt to file lawsuits than in any other time, so it’s important to have legal counsel to protect yourself in case someone decides to sue you.
Misrepresentation
Misrepresentation is the most common reason a person will sue a real estate agent. Most of them are related to the foundation of the property, but there can many other reasons why someone will file this type of lawsuit. It could be because of a problem with the property line, roofing issues, or even termites.
There are two types of misrepresentation lawsuits:
- Negligent – An agent has not disclosed any major problems with the property.
- Fraudulent – An agent is purposely hiding certain issues with the property in order to make a sale.
You should do whatever you can to limit your liability against misrepresentation lawsuits. So, you want to make sure you are using proper “seller disclosure forms,” which should also include any useful sources of information. Encourage your customers to use inspectors, attorneys, and other professionals to inform them of any potential issues. And you should avoid making any predictions about the property.
Breach of Fiduciary Duty
These types of lawsuits are filed whenever there is a problem with a transaction – one that causes one party to seek legal advice. They only make up 10% of real estate lawsuits, but it’s still something that you should protect yourself against. The best way to avoid them is to take continuing education courses so you can keep up with the real estate laws in your state. You should also use “agency disclosure forms” to provide an extra layer of protection.
Fair Housing
They make a very small percentage of real estate lawsuits, but they can cost you a great deal if the judge doesn’t rule in your favor. These types of cases are complicated because they are related to actions that a person felt was discriminatory.
You want to be careful about anything you do or say, especially when you’re dealing with what some states may consider to be “protected classes” (such as gays and lesbians). An agent may not want to sell to a particular race or ethnic background, which can lead to someone filing a lawsuit.
The best way to protect yourself from these types of suits is to make sure you are informed of any fair housing laws in your state, and be sure to document everything.
False Advertising
Whether it’s printed or online, any advertisements related to the sale of real estate must comply with state regulations. While some of them may vary, all states will require ads to present a truthful picture of the property’s condition, and they should never attempt to mislead buyers to make a sale.
Environmental Problems
These types of lawsuits are related to certain environmental hazards, which can include but are not limited to:
- Asbestos
- Lead-based paint
- Water contamination
They often occur when an agent fails to disclose information about these hazards, or he or she does not recommend a professional to solve them.
Agents are required to inform buyers of any hazards related to lead-based paint, and they must provide information about its dangers. Buyers have ten days to inspect the property for lead-based paint after an offer has been accepted, and they can use this information to renegotiate or back out.
As an agent, it’s important to educate yourself about any environmental hazard that may exist in your area, and you should make sure you have a list of resources for your customers. You also want to make sure you comply with any lead-based paint disclosure laws in your state.
Real Estate Settlement Procedures Act
The Real Estate Settlement Procedures Act involves the giving of something valuable to customers in exchange for referrals. Agents are not allowed to charge a referral fee to customers, but they are permitted to collect money from other agents. However, any information related to this exchange must be fully disclosed, or you could face a potential lawsuit.
The best way to protect yourself from these types of real estate lawsuits is to take continuing education courses about any regulations in your state. You should always make sure you have a thorough understanding of any new or current real estate laws, as it will limit your chances of being sued.
Americans with Disabilities Act
Your office should always make accommodations for any disabled clients that may come through your door. You should have ramps, curb breaks, or anything else that would make it easier for a disabled person to access the building.
The same is also true for a qualified employee who has a disability. You are not allowed to refuse that person because of his or her disability, and you are required to make the necessary accommodations so he or she can access the building and do the job.
Be sure to educate yourself about this law, because it can cost you a great deal if the judgment doesn’t go in your favor.
Using a Real Estate Attorney
Real estate agents can get sued for a number of reasons, especially in an age when people are more apt to take legal action against someone. Your best line of defense is to hire a qualified real estate attorney – someone who can represent you when a legal issue does occur.
If you want to find out more about how we can help you, get in touch with us today!