Does your real estate business have a good understanding of the various legal and ethical issues realtors face? If not, you may want to start learning about the most common traps you should advise your realtors to avoid. Even if your business is armed with an extensive Real Estate Insurance policy, the company could still find itself in sticky situations if your agents make any number of common but potentially dangerous errors. Thankfully, once you understand the different moral and legal issues realtors face, you can provide helpful guidance and advice to your real estate agents to avoid potential problems in the future. Here are the most frequent legal and ethical traps your business needs to be aware of, as well as the key pieces of advice to distribute to your company’s agents right away.
Familiarize Yourself With Fair Housing Laws and Real Estate Conventions
Perhaps one of the riskiest moves your business can make is not fully understanding relevant housing laws and conventions in the real estate industry. Both your company executives and your lower-level agents should become familiar with real estate laws and common lawsuit types. For instance, you may want to read up on the prevalence of:
- Errors and omissions
- Client losses or injuries
- Discriminatory selling claims
- Negligence and professional liability issues
- Failure of disclosure
Minimize the Risk of Legal Problems by Keeping Extensive Records Whenever Possible
Without thorough records, your business could face legal or tax issues. In many cases, your agents may be required to keep at least three years’ worth of records on every transaction. Remind your employees that successful real estate agents always keep records of:
- Formal documents
- Client offers
- Client texts and emails
In addition, there are a few particularly perilous situations where keeping records is even more important. Make sure to document situations such as:
- Relevant disclosures
- Cases of multiple offers
- Ads on social media
- Allegations of discrimination
- Allegations of wire fraud
Always Discuss Concerns With Your Lawyer, Broker, or Professional Legal Aid
Lastly, if your company’s executives or your real estate agents have questions or concerns, avoid going it alone. This move can lead to ethically and legally perilous decisions. Instead, you should:
- Reach out to your business’s professional legal aid group
- Contact a relevant professional organization for advice
- Call your business’s broker or other qualified third party
- Hire a qualified real estate lawyer to handle the case
For any business that operates in the real estate space, understanding potential legal and ethical pitfalls is essential. Even equipped with extensive Real Estate Insurance, your company could be at risk of lawsuits and financial fallout if your real estate agents are not aware of the most common traps they need to avoid. Fortunately, this guide can help your business steer clear of frequent industry issues. Make sure to advise your real estate agents to becoming familiar with relevant laws and conventions, keep extensive records, and get professional legal advice when in doubt.
About The Hilb Group
Deciding what coverage you need and what limits and deductibles make the most sense can be tricky. Founded in 2009, the Hilb Group has been helping clients to make sense of their options and make the smartest choices for their circumstances. Whether you need Warehouse Insurance or any other type of business or personal coverage, we encourage you to contact our friendly, experienced, and capable team today. Call us at (800) 776-3078 for a consultation.