Disclosure and Real Estate Professional Liability Insurance

Disclosure and Real Estate Professional Liability Insurance

Once you end up in court defending against a claim of malpractice you will fully come to realize that litigation is expensive, time consuming and emotionally draining. If a lawsuit is filed against you as a real estate agent, you can easily find yourself spending tends of thousands of dollars, for example, defending a claim alleging that you failed to disclose certain facts about a house you were representing.

As a defendant you will also find yourself spending a significant amount of time preparing a defense, including meeting with lawyers, responding to discovery and participating in proceedings. Thankfully you have real estate professional liability insurance to pay for the cost to defend the suit.

Disclose and avoid hassles down the road

A professional sued for malpractice must endure the scrutiny that is given to the professional’s work, which can be a very difficult endeavor. We live in a very litigious society and litigation involving real estate agents is on the rise. However, most suits can be avoided if agents are cognizant of the law and their responsibilities under the expected standard of care.

A large number of lawsuits arise out of allegations that agents or parties failed to inspect property and/or disclose material defects. Many times failure to disclose lawsuits arose simply because the agent or seller did not want the deal to fall apart and determined that it was a small formality that wouldn’t matter that much.

However, the majority of the time the agent or seller was unaware that the material fact should have been disclosed. If an agent is concerned about losing a sale because of disclosure, or lack thereof, then by definition, that fact should be disclosed; a material fact is one that may likely affect the decision of the buyer in purchasing the property.

Listen, it will be less expensive to disclose the material fact than to end up being sued and defending yourself in court. Agents or parties should disclose all facts that may affect the value or desirability of the property, simple as that. Under absolutely no circumstances should agents hide a material fact from a buyer. Even a listing agent has an obligation of honesty and good faith toward the buyer, which includes the duty to disclose certain information.

When acting as an agent, remember to provide the same level of service to each of the clients you serve. Why take chances that could inevitably ruin you financially, as well as tarnish your reputation? If you do end up in court you’re going to need the protection of real estate professional liability insurance to provide you with the resources for an adequate defense.

 

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