Legal Pulse 3Q 2018 Highlights

Legal Pulse 3Q 2018 Highlights

Dec 19, 2018
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The video edition of the quarterly report analyzes legal trends in risk management areas that effect real estate professionals: Agency, Property Condition Disclosure, RESPA, Technology and Third Party Liability.

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Welcome to the Legal Pulse risk management report for the third quarter of 2018. In this quarter, we will discuss the potential liability for real estate professionals for injuries suffered on properties. I am Finley Maxson, NAR Senior Counsel.

Legal Pulse is a quarterly report that explores litigation, statutes, and regulations affecting real estate professionals on a variety of issues. Every edition covers agency, property condition disclosure, and RESPA. Each quarter explores different topics annually- this quarter covers Technology Issues and Third Party Liability. re is also an Executive Summary that provides a one-page review of this quarter’s research. The Legal Pulse and Executive Summary are available for download on

In the first case, an individual interested in a property fell of a ladder while inspecting the property’s roof. The listing salesperson had procured the ladder for the roof inspection, and so the prospective buyer filed a lawsuit against the salesperson and his brokerage for the injuries suffered.

The brokerage filed a motion seeking judgment in its favor, arguing that the salesperson was an independent contractor and therefore the brokerage was not responsible for the actions of the salesperson. The prospective buyer stated that because the sign on the property had the brokerage’s name on it, he had assumed that the salesperson was an employee of the Brokerage. The brokerage’s owner stated the salesperson was classified as an independent contractor and the Brokerage did not control the actions of the Salesperson. The trial court entered judgment in favor of the Brokerage and the appellate court affirmed, as there was no evidence that the Brokerage controlled the actions of the Salesperson nor presented the Salesperson as its apparent agent.

The next case involved injuries suffered by the buyer’s representative when she slipped on snow and ice while visiting a property with an appraiser. She filed a lawsuit against the owners and the listing broker. The listing broker argued that she had no independent duty to keep the property free and clear of ice. The trial court ruled in favor of the listing broker and the buyer’s representative appealed.

The appeals court affirmed the lower court ruling. The buyer’s representative relied upon an earlier case where a listing broker was liable for injuries suffered by a visitor to an open house. The court ruled that the case was inapplicable to the facts of this case, as the listing broker had not invited the buyer’s representative onto the property nor had she agreed with the owners to keep the property free of snow and ice.

the Supreme Court of Tennessee determined that a home inspector was not liable for injuries suffered by a later guest to the property. Prior to purchase, the buyer had the property inspected and the inspector recommended repairs to the deck’s flooring but not the railing. Following the purchase, a guest fell off the property’s deck when the railing collapsed and the guest brought a lawsuit for injuries against the owner and the inspector. The lower courts ruled in favor of the inspector and the guest appealed.

The state’s supreme court affirmed. A home inspector’s potential liability to others was an issue of first impression for the court. The court ruled that a home inspector does not owe or assume a duty of care to later visitors to the property, and therefore the inspector was not liable to the guest for the injuries that he suffered.

For more insights on current litigation involving for real estate professionals, check out the Legal Pulse on Thank you.

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State Law Based Changes

Read a summary of this quarter's additions to the State Law Based Changes.