Increasingly, lawsuits are the preferred method of resolving even minor conflicts for some people. This makes it no surprise that real estate agents can find themselves named as defendants in lawsuits.
Most of these lawsuits include multiple defendants: the seller, the seller’s agent, the agent’s broker, the buyer’s agent, that agent’s broker, the home inspector, pest inspector, the appraiser … the list can go on and on and can include multiple counts in each lawsuit.
Just like the best defense is a good offense, the best strategy is to avoid being named in a lawsuit in the first place. There are strategies that can reduce or eliminate your exposure.
Residential real estate lawsuits almost always stem from a buyer feeling like they got less than they should have. Often, after moving in, they realize perhaps the house is not all they expected it to be. Sometimes, there are alleged defects, and sometimes these are not discovered by a home inspector during the home inspection.
This does not mean the home inspector did not do their job, or that the real estate agent was negligent for recommending a certain inspector. There can be a number of reasons that a defect is not found during a home inspection. For example, home inspectors do not determine the adequacy of any structural system or component; this is beyond the scope of a home inspection.
Or it could be something not reported because it was located in an area that was inaccessible to the home inspector, such as a room that was locked. Sometimes, known defects are intentionally concealed by sellers. Other times, the defect was in fact found by the home inspector and noted in the home inspection report, but was not acted upon by the buyers.
Most real estate lawsuits involve multiple parties, such as the seller, real estate agents, brokers, home inspectors, appraisers, and pest inspectors. The number of defendants and counts in a lawsuit can be extensive.
The best approach is to avoid becoming a defendant in a lawsuit altogether. By being proactive, you can reduce or eliminate your risk of exposure.
Residential real estate lawsuits often arise from buyers feeling that they received less than they expected. After moving in, they may discover that the property is not as they imagined it to be, with either alleged defects or issues not revealed during the home inspection.
This doesn’t necessarily mean that the home inspector or real estate agent was at fault. There can be various reasons why a defect is not detected during an inspection, such as it being outside the scope of the inspection or inaccessible due to locked rooms. Sellers may intentionally conceal known defects, or buyers may choose not to address issues noted in the inspection report.
Your professional home inspector can often be your first line of defense against these types of claims.
- Identification of potential issues: A thorough home inspection can help identify any potential issues or problems with the property. This can help everyone involved to address these issues before the sale, thereby reducing the risk of a lawsuit.
- Documentation of condition: A written report detailing the results of the home inspection provides documentation of the condition of the property at the time of the inspection. This documentation can be used as evidence if there is a dispute regarding the condition of the property at the time of sale.
- Increased transparency: Having a home inspection can increase transparency between the buyer and seller, as the inspection report provides a clear understanding of the condition of the property. This can help to prevent misunderstandings and disputes that could lead to a lawsuit.