REALTOR® ATTORNEY JOINT COMMITTEE
Realtor® Risk Reduction Strategies By: Sylvia Golden Norris, Esq. , RASM Association Legal Counsel
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n the real estate world, there are some pretty frightening 4-letter words every Realtor® fears: DBPR, FREC, CODE, and RISK. First, let’s be clear – the risk is real. Data from one national study found that a Realtor® is likely to have a claim filed against them every seven years! While 75% of Realtors® were NOT found liable, your time, energy, and wallet (even with E&O insurance) are at risk. But fear not, “Dearest Reader,” follow these tips for navigating the risks associated with these top four triggers. You will significantly reduce your exposure while giving yourself a strong defense if a claim is filed. 1 | MLS Printouts: Don’t get creative. Document with facts any claimed use (i.e., partitioning property, non-conforming mother-in-law suite, adding a dock or structure). With every listing, auto-generate a letter with a copy of the MLS printout asking the seller to review it and advise you of any errors or corrections. Remember, the disclaimer that the information is “deemed reliable but not guaranteed” is not applicable if you have not met the basic duties required: using skill, care, and diligence. 2 | Seller’s Disclosure: Although not required by law, if a seller will not complete one, then passing on the listing might be the best insurance you could get (and the cheapest). Only a seller can complete the disclosure. Your sole “mark” is typing the seller’s name and address and that is it. Be extra careful with a seller who has not lived in the property (trustee, personal representative, or bank-owned), and here’s why – even if they have not occupied the property, it is highly likely they have some knowledge about its condition, especially if rented at any time. Protect yourself by requesting in writing whether any repairs or maintenance were done. Blanks and unchecked boxes should be reviewed. Blanks are confusing as it’s not clear if the blank is intended, missed, or does not apply. Responding “N/A” or “Do Not Know” are acceptable answers, but only if they are true. If the listing is six months or older,
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ask the seller if there have been any changes, alternations, repairs, or any insurance damage claim. Confirm with the buyer’s agent they received the seller’s disclosure. Attaching the disclosure to the MLS is a common practice, but the best protection plan you can give yourself is an email to the cooperating agent verifying receipt. 3 | Contract Basics 101: Realtors® are authorized to use Florida REALTORS® contracts and forms. That permission does not extend to completing any other purchase and sale contract (i.e., Zillow), nor can you draft addenda. The parties themselves can write their own clauses, but other than including dates or other similar information, unless you are a licensed attorney, do not practice law. If you write a provision that is later a problem (for buyer or seller) you will be the first person they seek damages from. Drafting legal documents can also serve as an Article 11 violation of the Code of Ethics. 4 | The Written Word Rules, Dates, and Deadlines Matter: The person with the most written documentation wins (i.e., the claim goes away, it’s resolved sooner, or damages, if any, are minimized). As to the quality of the documentation, a signed document is 1st class, an email confirmation is business class, a text is the last seat by the airplane commode, and your memory or verbal narrative won’t even get you on the plane. Calendar all deadlines, remember they are not flexible, and copy those deadlines to your client. • This article is meant for educational purposes only. It is not intended to serve as legal advice and should not be used as a substitute for consultation with an attorney.
