Legal Issues in Real Estate You Ought to Avoid

Legal Issues in Real Estate You Ought to Avoid

Just before the global pandemic struck, home sales had been at their highest for a decade. Naturally, as is the case with almost all other businesses, real estate has slowed down because of the virus. Yet, sales are still expected to increase, even if that happens at a slower pace. However as sales increase certain legal issues likely will as well.

For real estate brokers, experts predict a strong rebound for them and business may be back to normal. So before that happens, it’s a good time to alert and remind brokers of legal issues they need to be aware of and avoid at all costs because one legal suit against you can be very costly.

Disclosure Issues

Real estate brokers are born to sell. When selling anything, there can be a tendency to misrepresent what you are selling; stretching the truth, exaggerating, and such. After all, you want the product you are selling to be viewed in the best light; in this case, it’s property.

However, this misrepresentation can get you in legal trouble with clients. The same applies even if you are not a broker and selling property on your own. You might see your exaggeration of the pristine condition of a property, although it’s not, as a shrewd way of selling, but the law doesn’t see it like that. It sees it as grounds for someone to sue you. Indeed, it’s perhaps the biggest reason why real estate brokers get sued. There is certain information that you have to disclose or you could be convicted of fraud. 

Keep your claims of a property real and honest to avoid this problem. Make sure any potential buyer clearly understands what you are saying and what you are delivering to them. 

Protect Client Information

As a broker, you have a lot of information about your clients. You are responsible to store and guard this information. Be mindful that there are laws regulating the preservation and security of this kind of information.

Most likely, this information is on your phone, tablet, or computer, so investing in a good protection software would be a good idea since hackers are all around us and would love to get their hands on information about others, be it addresses, contact info, bank accounts, credit cards, etc. If you get hacked, you will be deemed responsible for letting that information go into the wrong hands. 

Hard copies must also be handled carefully and confidential information should not be placed in areas that anyone could have easy access to, nor should it be mixed with other non-confidential paperwork. Be careful where client information is placed and that only you or others involved in a deal have access to it.

Estate Planning

Estate planning needs legal representation. It is recommended by this law firm, located in Atlanta, that estate planning needs a will, living trust, advanced health care, power of attorney, and an HIPAA release form. These requirements help avoid legal issues, such as the probate court, and they also prevent family conflicts over property and belongings. Considering the enormous number of lawsuits concerning assets, it only makes sense to protect your real estate assets and other belongings and make sure they reach only your beneficiaries.

Lots of surprises and mistakes crop up during the process of estate planning. Most people think they have to be a celebrity to do proper estate planning; the word estate perhaps throws people off. However, estate planning is for anyone who owns the property and wants to plan how that property will be distributed after they’re gone. Some people may want to contact a distant relative when going through the motions of estate planning, and hire person tracing services in order to track down these individuals.

Dual Representation

Representing both the seller and buyer of a property is rarely ever a good idea. It is illegal in eight states and the concept itself is not usually preferred. You must have written, documented permission to be a dual agent. Even so, you can find yourself in a situation of conflict of interest, and not working in the best interest for either client which could lead to legal issues.  


Unfortunately, just like in any other industry, discrimination can be found in real estate. You might have clients who refuse to sell, buy, or rent to others based on race, religion, or gender. Even if it means a deal not going through based on this discrimination, it’s better to remove yourself from this kind of situation and keep your reputation of being fair and unbiased intact.

A simple ad, phrased in a discriminatory way, even if not intended, can land you in hot water. Housing laws are always changing, so you need to update your information about discrimination in the industry and on new housing laws in effect this year.

Legal Issues in Real Estate You Ought to Avoid

Any legal issue that goes to court will be costly. You can avoid that by understanding the real estate business better before you become your own agent. If you already are an agent, we believe these reminders are needed. They will help you to always keep your decisions in check and to take proper actions to avoid problems that could potentially go to court.  

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