A real estate agent has multiple duties that they are legally obligated to carry out. If they breach these duties, they can be subject to legal action from their clients. The following is a brief outline of the fiduciary duties that a real estate agent is obligated to perform, and what failure to perform these duties looks like.
Duty of Confidentiality
A real estate agent is trusted with a great deal of their clients’ personal information, including identifying and financial information as well as a client’s motivation for selling their home, the lowest offer they will accept, and more. Because of the amount of sensitive information that real estate agents require in order to do their job properly, they have a legal responsibility to keep all of that information confidential. Failure to do so is considered a breach of duty except in very specific circumstances, such as if the information is required by a court for a hearing.
Duty of Disclosure
Real estate agents must disclose any information to their client that may have an effect on the client’s decision to move forward with a purchase or not. This includes full disclosure of exactly how much the real estate agent expects to be paid for their services as well as the condition of the property in question that may change the client’s mind about following through with the purchase. An example of a failure to disclose, follows:
The real estate professional failed to advise her client that a housing unit the client had expressed interest in (“Property A”), was available before the client concluded a contract of purchase and sale on a different housing unit (“Property B”). A sale on Property A had failed while the client was negotiating terms of sale on Property B. There was evidence that the real estate professional knew of her client’s preference for Property A, that she knew that Property A became available before the subjects were removed on the sale of Property B, and that she failed to advise her client that Property A was available for purchase. Regardless of whether the client could have cancelled the sale agreement on Property B, the real estate professional still had a duty to notify her client of the availability of Property A.
If a real estate agent does not fully disclose any terms or property conditions that might impact the buyer’s decision regarding the purchase, they are considered in breach of their duty to their client.
Duty to Avoid Conflicts of Interest
A real estate agent is legally obliged to always put the best interests of their client first. In most cases, the best interests of the client align with the best interests of the real estate agent, but if there is some situation where a conflict of interest arises and the real estate agent’s ability to act fully in the best interests of the client is impeded, they must fully disclose this to the client. Failure to disclose a conflict of interest to a client is a breach of fiduciary duty.
What to Do When a Real Estate Agent is in Breach of Duty
If your real estate agent is in breach of any of the duties outlined above, you can pursue legal recourse. Speak to an experienced lawyer that specializes in real estate law to determine the best course of action to take. Get in touch with Hoogbruin & Company today to book your free consultation with a lawyer. We prioritize our clients and are dedicated to getting the best possible results for every case we take on.