I’m not an attorney, nor do I play one on TV, but I read an article recently that I thought you would be interested in, and I would like to share with you the 5 Ways Real Estate Agents Can Avoid Getting Sued. It’s not so much about “contract laws”; it has more to do with risks and liabilities that can be a pain to deal with—and perhaps involve a law suit—regardless if you are to blame (or not).
Giving Advice — Or Not Giving Advice: Have you ever had a client tell you that they don’t want a home inspection? Or waive a clause on a purchase contract? You could be held liable if you don’t strongly advise your client about the possibilities of what could go wrong. Insist that your clients sign waivers acknowledging their decision, and add a “hold harmless” clause to the waiver. And to protect yourself even further, consider buying “errors & omissions” insurance, which will pay your court expenses if a client decides to sue you.
People Stealing Things During Showings/Open House: Showings and open houses give thieves an opportunity to steal items from the home—including keys that could allow them to break into the home later. Attorneys suggest that you create an “open house” checklist for your clients to follow. Include a “hold harmless” clause in your listing contacts. You also may want to tell them to get in touch with their insurance company, letting them know that the home has been listed and see if there is any extra coverage they might need during the listing time period.
Your Car and Auto Insurance: If you drive a car to show property (that you personally own), your current auto insurance coverage may not cover accidents while using the car for business purposes. Check into “hired” auto insurance, which is a supplement to your personal auto insurance coverage.
Slipping and Falling Mishaps: When it rains or there is ice on the sidewalks and driveways, if really not your responsibility when it comes to showings or open houses. However, if people slip and fall, they are looking for someone to sue, you may be one of the people named in a lawsuit. Review your General Liability insurance and make sure you are covered.
Keeping Data Safe and Private: Protect your files from hackers and identity thieves by having security software and secure files to ensure that your client’s info is safe. It’s suggested that you have a policy in place (even if your company has one) and install anti-virus software on your computer. Change your passwords on a regular basis. Encrypt the data. Use back-up storage. Limit the number of people who can access files. Yes, there is such a thing as cyber-liability insurance if you are hacked.
Check the Board of Realtors® and see if they offer a class on this topic. One law suit (whether it’s your fault or not) can ruin your career and reputation.