Realtor Malpractice May Be Difficult To Prove In Virginia

Role Of The Agent

Brien Roche

Real estate malpractice by a real estate agent is a form of professional negligence. The claims are similar to legal or medical malpractice cases. The plaintiff must prove what the standard of care is. The standard of care is a function of the real estate regulations, state code or what a reasonable and prudent agent would do.

The relation between a real estate agent and a seller is governed by a listing agreement. The listing agreement is in large measure going to define what the duties are. The duties define the standard of care.

As to a buyer there may be a Buyer/Broker Agreement between the agent and the buyer. This defines the duties.

Common Problems

Some common areas where real estate agents get themselves into trouble in terms of dealing with buyers and sellers are:

failing to properly describe the property for sale. For instance if the seller informs the agent that the property has certain features and those are not set forth accurately in the sales info presented to the public then there may be some fault on the part of the agent;

if the agent fails to convey all offers and demands for settlement then there may be fault.

if the agent incorrectly explains certain contract language to the buyer or seller, there may be fault. However the sellers and buyers are expected to read the contract. If they do not know what something means then they should ask the agent. The agent is not an attorney. The agent cannot give legal advice. Furthermore most residential real estate contracts are prepared by the local Board of Realtors. They are form documents.

sometimes zoning issues arise as part of a real estate deal. Although the agent is not a zoning attorney the agent must be certain not to mislead either buyer or seller as to rights or duties. These questions may apply to streams or bodies of water that are nearby, set-back issues or right to build issues. The Listing Agreement and/or Sales Contract probably cover these matters. They put the burden on the buyer or seller to check out these issues.

Causation

As is true with most malpractice cases the core issue may be not so much one of fault but what did that fault cause? For instance an agent fails to make some disclosure about the property. The real issue may be what did that cause? It obviously didn’t cause the underlying condition. It may however have caused the buyer to buy property that she otherwise would not have bought. In contrast it may have caused the buyer to incur certain expenses. Those issues of causation can be tricky. They frequently become the focal point of the claim.

In addition there may be a defense of contributory negligence or breach of contract by the plaintiff. That breach of contract or fault may consist of the plaintiff not reading the contract documents. Or it may be their failure to obtain professional assistance. This may be from a lawyer, architect or otherwise. Call, or contact us for a free consult.

Statutory Defenses

A frequent source of contention in Virginia is the obligation of the real estate agent to disclose and what has to be disclosed. Va. Code § 54.1-2131 deals with the obligations of agents representing sellers. Section B within that Code section requires that the agent disclose to prospective buyers all material adverse facts pertaining to the physical condition of the property which are actually known by the agent. That does not include matters that are outside the boundaries of the land or that relate to other properties and likewise does not apply to matters relating to governmental land use regulations or matters relating to highways or public streets. That section goes on to state that nothing in this article of the Code limits the provisions of the Virginia Real Property Disclosure Act (VRPDA).

Within the VRPDA, Virginia Code § 55.1-712 says that as long as the agent conforms with the disclosure requirements under the statute, then the agent is not liable to any party to a residential real estate transaction for a violation of that statute or for any failure to disclose any information regarding any real property subject to the statute.

Those protections are very extensive. They provide a great deal of protection to the real estate agent. Some might say that they basically insulate the agent from liability.

Owner Liability

Virginia Code § 55.1-710 deals with owner liability. For the most part the owner is not liable for errors, inaccuracies or omissions of any information delivered pursuant to the statute if the error was not within the actual knowledge of the owner or was based on information provided by public agencies or other such persons or entities upon whom the owner could reasonably rely. The precise language of the statute is important to determine the scope of protection to the owner. The point to be made is that the owner likewise has substantial protections as long as they comply with the VRPDA.