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Real Estate Agents’ Liability for Errors and Omissions

General
July 12, 2017

The Florida real estate market has long been attractive to buyers. As the Sunshine State experiences a construction boom and job growth since the great recession, the market continues to gain strength, especially in cities such as Miami, Fort Lauderdale, Orlando, West Palm Beach, Tampa, and Jacksonville.

Realtors are held to standards of professional conduct.

A strong real estate market means plenty of opportunities for real estate professionals. In their eagerness to close the deal, however, agents and brokers can make errors and omissions that cause financial losses for buyers and sellers.

Florida real estate agents and brokers are held to standards of professional conduct that, if not met, can expose them and the brokerage firms they work for to liability. If you have suffered financials losses due to misrepresentations or other misconduct by a realtor, you may be able to file a lawsuit to recover your damages.

The Business Trial Group handles real estate lawsuits on a contingency-fee basis, so you will pay no hourly fees or expensive retainers. In fact, we charge no fees whatsoever unless and until we make a recovery in your case.

Learn more during a no-cost, no-obligation case review.

Professional Duties of Florida Realtors and Brokerage Firms

Florida law sets forth the responsibilities owed by real estate brokers and sales associates to their clients. This same conduct can also be grounds for a lawsuit.

The professional duties that Florida realtors owe include:

  • Dealing honestly and fairly
  • Accounting for all funds
  • Using skill, care, and diligence in transactions
  • Disclosing all known material facts of the property to potential buyers
  • Not making misleading, deceptive, or fraudulent representations to potential buyers

Florida Realtor Lawsuits Causes of Action

Lawsuits against residential or commercial realtors typically allege one or more of the following causes of action against the agent and/or the brokerage:

Fraud by a Real Estate Agent or Broker

Fraud means that the real estate agent intentionally made a false statement concerning a material fact, or intentionally omitted (left out) a material fact about a property. In the context of a real estate transaction, a material fact is a fact that a reasonable person would find relevant to the decision of whether to purchase or sell a property. A party suing their Florida realtor under a fraud cause of action may be entitled to punitive damages.

Negligent Misrepresentations by a Real Estate Agent or Broker

Negligence also relates to omissions and misrepresentations of material facts, but it deals with unintentional (instead of purposeful) omissions and representations. While negligence is a less serious offense than fraud, the harm suffered by buyers and sellers may be indistinguishable, and they can still recover their financial losses when their realtors make unintentional errors.

Breach of Fiduciary Duty by a Real Estate Agent or Broker

In certain cases real estate agents and brokers owe clients a fiduciary duty. A fiduciary duty requires a Florida real estate professional to put the best interests of their clients ahead of their own interests. This high standard of care reflects the fact that agents and brokers, as compared to their clients, usually possess superior knowledge about real estate, which creates the potential to abuse their position of authority.

Breach of a Real Estate Contract

The specific agreement between a real estate agent and a client can impose duties on the agent that go beyond their general duties of honest and fair dealing.  When real estate agents breach a contract with a client, they can be liable for the financial losses stemming from that breach.

Vicarious Liability of Florida Real Estate Brokerages

When a real estate agent/broker does not meet their professional duties and a lawsuit arises from their misconduct, the brokerage firm they work for may be held liable under a legal concept known as “vicarious liability.”

Brokerages can be liable for an agent’s misconduct.

Florida courts have ruled that if a real estate firm profits from the actions of an agent—for example, by earning money on a real estate transaction that involved misconduct—then the firm cannot disclaim the misconduct while also accepting the fruits of the agent’s efforts.

Examples of Real Estate Agent Misrepresentations

Misrepresentations by Florida real estate agents and brokers can occur in commercial or residential transactions and take many forms. If you are concerned that you have been deceived or lied to by a real estate professional, the examples below should provide some more context. You can discuss your specific issues with our Florida real estate attorneys, free of charge.

Misrepresentations about Building Regulations

Florida building regulations place limits on how an owner may build on a property. For many clients, building regulations are material to their purchase decision—especially if they plan to renovate the property.

The Business Trial Group recently reached a settlement with a well-known real estate agency over an agent’s misrepresentation about a property’s compliance with building regulations. Our clients purchased a Florida property based on the agent’s representation that the property was in compliance with building regulations, when in fact the property did not comply.

Misrepresentations about Zoning Laws

Another material fact for potential buyers is how property is zoned. Zoning regulations and restrictions specify how property within certain areas can be used (e.g. for residential, commercial, or industrial use).

For the buyer who is looking to establish a new location for a business, whether or not the location allows commercial activity is of crucial importance. If a real estate agent assures the buyer that the property can be used for a business—but zoning laws prohibit this—the agent may be liable for the misrepresentation.

Zoning laws do not allow our client to use the site for its intended purpose.

For instance, Business Trial Group attorney Roger Brown is currently representing a client who purchased property as a site for a private school, only to find out after closing that zoning restrictions prohibited using the property for this purpose. Mr. Brown’s client has brought claims against its real estate broker, real estate attorney, and the seller of the property for, among other things, the additional expenses it has incurred due to their alleged negligence.

Other examples of residential and commercial real estate agent misconduct that can lead to legal action include:

  • Misrepresenting the value of a property
  • Not disclosing property damage or flaws
  • Over-inflating or exaggerating property features
  • Not disclosing an easement, title problems, or environmental problems
  • Misrepresenting the property boundary
  • Misrepresenting property information, such as the age of an addition or feature

Florida Contingency-Fee Real Estate Attorneys

The Business Trial Group represents property buyers in lawsuits against residential and commercial real estate agents and brokerage firms on a contingency-fee basis.

No matter how complex your real estate dispute, we charge no hourly fees. This allows our clients to take on wealthier and larger real estate companies and obtain justice.

With offices in Fort Lauderdale, West Palm Beach, Ft. Myers, Tampa, Orlando, Jacksonville, and Tallahassee, the Business Trial Group’s experienced real estate attorneys represent clients throughout Florida.

Learn more about our contingency-fee real estate attorneys and find out if you have a case during a free consultation.

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Tell us about your situation so we can get started fighting for you. We tailor each case to meet our clients' needs.

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