SUING A REAL ESTATE AGENT / SUING A REALTOR

Suing a real estate agent is not a decision to be made lightly. Before deciding to file a lawsuit against a real estate agent you should consult with an experienced real estate attorney about the specific facts and circumstances of your case.


Common lawsuits against real estate agents involve legal claims for such things as:

*Negligence;

*Breach of listing agreement;

*Hiding, not disclosing, or concealing of information;

*Fraud;

*Misrepresentation;

*Breach of statutory duties;

*Breach of fiduciary duties;

*Breach of duty by self-dealing;

*Conspiring with other real estate agents

* Factually, the basis for claims against a real estate agent or grounds to sue a real estate agent may be things like:

*Made misrepresentations regarding water damage, foundation defects, building permits, condition of the roof, stucco, existence of mold, remodeling costs;

*Failed to actively market the property;

*Knew that there was a discrepancy between square footage or lot size;

*Knew about future negative impact from development and failed to disclose it;

*Failed to make sure the property viewed was actually the property purchased;

*Failed to advise client to get legal or tax advice where required;

*Failed to disclose that there was a dispute with neighbor who had already threatened lawsuit;

*Forged signatures;

*Missed dates and deadlines under contract;

*Provided incorrect estimates for cost of repair of property;

*Provided incorrect statements regarding use of the property;

*Agent’s error caused loss of earnest money;

*Failed to disclose they had ownership interest in property being purchased;

*Failed to disclose that they were part of the company / seller who was selling the property.

*Told client not to disclose information and now client is being sued.


As for the type of damages you may be able to recover in a lawsuit against a real estate agent, you should consult with a real estate attorney. The types of damages depend on the conduct of the real estate agent and your real estate contract. You might be able to recover damages for such things as:


*The difference between the property value as represented versus the value of the property as received;

*Diminution in value;

*Cost of repair;

*Stress, aggravation, inconvenience;

*Loss of use;

*Relocation and moving expenses;

*Personal injury damages (for example exposure to mold or meth);

*Out of pocket expenses;

*Attorney fees and court costs.


What if the real estate agent has no money?


Many states require real estate agents to maintain errors and omissions insurance.  Under Colorado law, real estate brokers are required to maintain Errors & Omissions insurance. The minimum amount of Errors and Omissions Insurance for a real estate agent is $100,000 per claim $300,000 annual aggregate. See Colorado Real Estate Commission Rule D-14. There may be additional insurance coverage available through the company that the insurance agent is working for. Additionally, you may be able to collect against the real estate broker personally.


What about recovering attorney fees and costs?


Many states require the real estate agent to use forms that are pre-approved by the state divison of real estate. With narrow exceptions, Colorado real estate brokers are required to use Colorado Real Estate Commission approved contracts. The Real Estate Commission approved contracts contain provisions that state in the event of litigation relating to the contracts the winning party shall be awarded their attorney fees and costs. Accordingly, regardless of whether the dispute arises from a purchase contract, an Exclusive Right to Sell, an Exclusive Right to Buy, an Exclusive Right-to-Lease Listing Contract or an Exclusive Tenant Contract the winning party will be entitled to an award of their attorney fees and costs.

Note: This post generally uses the terms "Real Estate Agent" and "Real Estate Broker" synonymously. Under Colorado law, a person licensed to sell real estate is a "Real Estate Broker" or a "Real Estate Salesperson." Oftentimes, people use the word "Realtor" generically to mean a real estate agent. However, the term REALTOR® means someone who is a member of the National Assocation of Realtors. Not all real estate agents are REALTORS®. The term REALTOR® is a federally registered collective membership mark owned exclusively by the National Association of Realtors. See http://www.realtor.org/letterlw.nsf/pages/TrademarkLogoFAQs

Credit: Gelman & Norberg, LLC.All rights reserved.www.gelmannorberg.com/blog. This blog was written by a Colorado Real Estate Attorney and is related to Colorado real estate law. The law changes from jurisdiction to jurisdiction and this article is provided for informational purposes only. For a free consultation with a Colorado Real Estate Attorney, contact www.gelmannorberg.com.