Agency Litigation

When Real Estate Agents Get Sued
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In the 1970s I was called upon to be an expert witness for a brokerage who was accused of being negligent during an open house as a valuable ring went missing. The judge found fault with the homeowner who did not hide their valuables despite warnings by the Realtor. From there, word spread as it was difficult to find an active real estate professional who understood the real estate act, the actions of the market and who could write a proper report.

To date, I have testified in probably close to 600 trials and a good percentage of those trials have involved the actions or inactions of a Realtor. Maybe 1 in 10 cases actually get to trial so I have written thousands of professional reports on agency matters. Some agents were innocent, some guilty but overall, most were just sloppy in the way they conducted themselves.

Some of the Agency issues have included:

  • non disclosure of material facts
  • non disclosure of conflicts of interest
  • misrepresentation
  • conflicts of interest
  • bad advice, such as waiver of a home inspection or financing clause
  • non verification of facts such as mould, asbestos, water leakage, etc.
  • fraud (it is not common)
  • not understanding the Real Estate Act
  • bad contracts, poor wording
  • and more

The Right Lawyer

Real estate lawyers deal with contracts, they close real estate deals. Unless they handle that speciality or are in a smaller community, you need to see a litigator, a lawyer who handles litigation

Why I Do Not Recommend Going “After the Agent’s License”

Frankly, in Ontario, the Real Estate Council of Ontario or RECO has not dealt harshly with registrants. Too many have received simple fines, admonishment or have to take an ethics course. Given their numbers, limited agents or brokerages have seen their licenses terminated. It happens, but not enough. Best advice, do not file a report to RECO if you are heading into litigation. Should RECO or a real estate board find the situation to be minor that can be used by the other side to diminish your claim in court.

Is it Worth It?

Your first consultation with a litigation lawyer should give you some idea of the costs that are ahead of you. For simple matters the first question to be asked, “is it worth it?” Does the cost to rectify an issue justify the fees that will be paid to the lawyer, to the experts? Think it over carefully. If you do not go forward then launch a formal complaint to the local real estate board and to RECO about conduct.

Be Financially Prepared and Find the Right Lawyer

You cannot win by finding the lowest priced lawyer to handle your case. You need a lawyer who has built a reputation in litigation and for real estate matters. You want to interview a lawyer, find the right fit. Ask around. Search online for real estate ligation and note the lawyer, the experts. No matter what you expect going in, the journey to a trial is long and expensive. Keep your actions with your lawyer to necessity

Become Organized and A Packrat

Find every piece of correspondence relating to your case, from the ad that enticed you to every email between you and the agent. Best bet is to scan them in a sequential order with second best being binding them then tabbing and don’t forget an index.

Hire the Right Witness

Expert witness who work in agency matters are limited in Canada. Before hiring an expert check their record, ask your lawyer who they recommend, ask around. Your expert will review all documents, work with your lawyer and produce a report that must be independent. You will pay first for that report which may be able to settle the case. If it goes to trial, your expert will be billing you on an hourly or daily rate in addition to the original report.

Emotions

This is the hardest part of the entire process. You are angry. The agent did you wrong and you want revenge. More court cases have clogged the courts solely on someone wanting “their day in court.” Once embarking on litigation, you must get into a business mode because it now about money. You have to keep anger or hurt in check, which is not easy and take advice from your lawyer, from your experts. Litigation is a business deal and strong emotion do not make for good business.