Avoiding Realtor Liability

Overview

• Realtor Duties and Obligations
• Common Claims
• Case Law
• Insurance Coverage

Caveat Emptor

Statutory Duties (ORS 696)

• Present all offers
• Act with diligence
• Account for money received
• Disclose conflicts
• Refer to experts when necessary

Fiduciary Duties

• Loyalty
• Good Faith
• Disclosure of Material Facts

Contracts

Statute of Frauds

Misrepresentation

• Statement you know or should know is false
• Material
• Intent and Reliance
• Damages

Types of Misrepresentation

• Intentional (Fraud)
• Negligent

Knowledge

What is "Material"?

Reliance

• Reasonable Person's Perspective
• Fact vs. Opinion
• To the Detriment

Importance of Inspections

Common Misrepresentations

Boundaries or Size

Condition of Property

Financial Status of Buyer

Disclosures

Patent vs. Latent
Patent - visible; subject to inspection
Latent - can't see it; not obvious

UTPA

Unauthorized Practice of Law

Handling Claims

Mediation, Arbitration & Litigation

Duty to Defend & Duty to Indemnify

Tendering Claims to Insurance

Common Exclusions

• Intentional Acts
• Violations of State or Federal Law
• False Advertising
• Acts of Dishonesty

Cases

Cousins v. Realty Ventures

• Hodgins = realtor
• Cousins = buyer
• Rule = duty of loyalty, duty to present offers

May v. Hopkinson

• Hopkinson = realtor
• Mays = buyers
• Rule = disclose and present all inspections

Keough v. Richard

• Log cabin community
• Obvious signs of leaks
• Buyer declines inspection
• Rule = importance of inspections

Easton v. Strassburger

• Sloping floors and landscape netting visible
• Buyer sues realtor, developer and contractor
• Rule = disclose material facts

Davis v. Taylor

• Realtor: "great condition"
• Buyer discovers foundation problems
• Realtor: "it's no longer my problem"
• Rule = words matter; court said jury could "infer" that realtor had knowledge