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Abiding By The Real Estate Law: Common Legal Concerns Overlooked By Agents

Gavel in real estate lawyer's office

Posted by: George J. Dramis, III
Updated: January 15, 2019

All real estate dealings come with potential legal risk. It is common to see buyers and sellers filing lawsuits against their agents based on different aspects of the real estate law. As a current or aspiring agent, it is fundamental to familiarize yourself with these legal issues and try to steer clear of them to avoid devastating consequences. Real estate prelicensing and continuing education is an excellent source of information on this topic. In this article, we will discuss these concerns and provide advice for ensuring you are compliant.

False Advertisements

Looking at the real estate law, there are specific advertising requirements to which agents must adhere. Most agents neglect these laws as defined by the state licensing laws and the REALTOR® code of ethics. These laws mostly touch on the truth of the information provided by the advertisements and demand that agents always post accurate pictures in their ads. In recent years, these laws have extended to the ads posted on the internet, which are expected to be equally true and accurate. You should ensure the ads you place are truthful and compliant with the specific laws adopted in your state.

Equal Allocation of Real Estate Units

This particular legal concern is the source of many lawsuits. Agents need to be very careful here because the judgments associated with this issue can be very costly. This concern gets more sophisticated when you examine it at the state level, as some regional governments have clauses for the protected groups of people who are usually subjected to discrimination. If you find a real estate property where the sellers do not want to sell to people of a particular ethnic background or religion, walk away from that client. Testing is usually done to detect any form of fair housing violations, and though this takes some time, it is still lawful.

Disclosure of Accurate Information

Most lawsuits filed against real estate agents fall within this category. Agents are required to inform buyers about the exact condition of the property before they agree to purchase it. If some of the information given to the purchaser is incorrect, and the purchaser finds out about it, they can go to court and file a lawsuit. Most common misinterpreted aspects of buildings include the foundation, structural features, pest infestation, boundary conflicts, and roof structures. Agents who receive information from sellers about the house should acknowledge those issues when communicating with the buyer or buyer’s agent to avoid being sued later. To steer clear of this legal pitfall, ensure that the sellers fill out the sales disclosure forms. Make sure you document any information the seller gives you and push for the involvement of qualified inspectors and other professionals when necessary.

Environmental Concerns

Environmental hazards such as asbestos, contaminated water, and leaded paint could easily lead to legal issues for agents. Agents and brokers are expected to recommend these issues to qualified people for inspection. Failure to do so could result in legal problems based on the environmental laws. To avoid this legal matter, it is advisable to be well-versed in the common environmental issues in your area. You should also have a group of environmental inspectors to suggest to your buyers.

Real estate agents who overlook these legal issues end up facing huge problems sooner or later. Keeping tabs on these legal concerns and ensuring you’re abiding by them in your day-to-day dealings will help you safeguard your reputation, business, and career.

George J. Dramis, III is a Sarasota-based attorney behind Band, Gates & Dramis, P.L. His areas of legal practice include real estate law, personal injury, construction law, insurance coverage, surety law, and trial practice. He was admitted to The Florida Bar in the year 1992 and is listed as one of the Best Lawyers and Law Firms by U.S. News and World Report.​