How to Sue a Real Estate Agent in California?

If an individual has an issue with a real estate agency in California, they can file a complaint with the California Department of Real Estate (DRE). The DRE is the California state agency that licenses real estate brokers and salespeople.

The California DRE also investigates complaints against practitioners and disciplines those who violate the law. If an individual has any questions regarding their issue with a California real estate agent, they should consult with a local California lawyer.

What Is a Real Estate Agent Responsible For, and What Are They Not Authorized to Do?

In general, a real estate agent is an individual who is certified and licensed to perform real estate business in a given state. Real estate agents represent buyers and sellers of real estate, which includes land and buildings.

Real estate agents have training and education in all matters related to real estate, such as the regulations that govern property sales. A real estate agent must pass a state board exam to obtain the proper license.

Examples of tasks real estate agents handle include:

• Handling standard client forms;
• Drafting and preparing offers on properties and other required paperwork;
• Answering questions that clients may have, for example, describing the home buying or selling process;
• Reviewing real estate contracts, such as:
  • lease agreements;
  • purchase agreements; and
  • rental contracts;
• Negotiating sale prices between sellers and clients;
• Closing any deals;
• Showcasing properties to potential buyers; and
• Guiding clients through tours of the property.

Of course, this is not an exhaustive list of all of the things real estate agents do. The phrase real estate agency may be used interchangeably with salespeople and brokers.

It is important to note, however, that brokers work alone due to the more rigorous state board licensing processes. Typically, real estate agents have to work with a broker.

There are also certain things that real estate agents are not permitted to do, including:

• Giving legal advice, unless they are a licensed attorney and are acting in a capacity as the client’s attorney, as this would constitute authorized practice of law;
• Giving tax advice, as realtors are not licensed to; or
• Violating the Fair Housing Act, for example, disclosing certain details about a neighborhood or community that the Act protects.

What Are Misrepresentations and Failures to Disclose?

In the legal context, misrepresentations occur when a real estate broker misstates a material feature of the property. This is frequently included with a failure to disclose, which occurs when a broker fails to address or disclose a material feature of a property altogether.

A misrepresentation often involves the foundation or crucial structural features of a property, property boundaries, or termite or pest issues. Common examples of undisclosed problems include:

• Easements on the property
• Title issues
• Environmental concerns

What Are the Most Common Lawsuits Against Real Estate Agents?

Because of the nature of their work, there may be many different reasons why an individual may want to sue a real estate agent. The most common legal issues emerge when an agent is negligent in their fiduciary duties.

A fiduciary is an individual who is entrusted to act on behalf of another individual and make decisions in their best interests. Fiduciaries are individuals who are entrusted with legal obligations or duties to their clients based on their knowledge and specialized training.

The most important fiduciary duty requirement for a real estate agent is to be honest and make decisions in their client’s best interests. A real estate agent will spend most of the purchasing process working independently of the client by handling issues such as negotiating with other parties, coordinating inspections, or reviewing contract documents.

Other common reasons an individual may want to sue a realtor include:

• Failing to disclose a property defect: The seller or buyer is ultimately responsible for disclosing any property defects involved in a real estate sale transaction. An agent must disclose anything that materially affects the property;
  • Even if the agent was not aware of the defect, they may be used if they represent a party who did not know;
  • This means the agent must reveal facts when the value or desirability of the property is negatively impacted;
    • These defects can include:
      • construction issues;
      • improvements without permits;
      • covenants;
      • leaks;
      • cracks;
      • termites;
      • noise; or
      • nuisances;
• Negligence: An agent may also be sued for negligence if they fail to exercise reasonable care towards others;
  • Reasonable care is what a reasonable or prudent individual would do under the same circumstances;
    • In these cases, it would be what a fellow real estate agent would have done; and
• Failing to keep an individual’s personal data safe: An agent has access to lots of personal information, especially from their clients. They may fail to keep that data secure, for example, defending it from hackers by installing security software. If this is the case, they may be subject to a legal claim for any damages resulting from the mishandling of client data.

What Remedies Are Available if I Sue a Real Estate Agent?

In the majority of lawsuits involving real estate, a court will award monetary damages to a plaintiff who was wronged by a real estate agent, which may include:

• Compensatory damages: These damages are associated with a breach of contract or misrepresentation;
  • In addition, punitive damages may be available in cases where there was fraudulent misrepresentation;
• Remedies in equity: This may include remedies such as an agent being instructed to cancel the contract they breached through rescission; or
• Other damages: This may include emotional distress or other types of damages.

When an individual is suing a real estate agent, they will need to gather all of the documents that show what damages they suffered. It is also essential for an individual to mitigate their damages.

This means that an individual should not cause themselves additional harm and try to recover that from the real estate agent.

How Much Can I Sue a Real Estate Agent For?

The legal consequences for real estate lawsuits usually result in an award of monetary damages. The amount awarded will depend largely on the type of claim and the nature of the dispute.

For example, breach of contract claims may involve remedies that are specifically listed in the contract. In addition, some claims may involve statutory damage limitations.

Other consequences for real estate agent claims may include, but are not limited to:

• A suspension of agency operating privileges
• Civil fines
• Criminal consequences

How Long Do I Have to Sue a Real Estate Agent?

Most legal claims against real estate agents will be based on breach of contract. These claims have a four-year statute of limitations in California.

What Kind of Lawyer Do I Need to Sue a Real Estate Agent?

If you have an issue with a California real estate agent, it is important to consult with a California real estate attorney. Your attorney can help you understand the specifics of your case and determine if you have a claim for a lawsuit.

Your lawyer will represent you in court if your claim is not settled before trial. Your lawyer can also review any contracts or other documents related to your real estate transaction before you sign them to help prevent future disputes.