The video edition of the quarterly report analyzes legal trends in risk management areas that effect real estate professionals: Agency, Property Condition Disclosure, RESPA, and Fair Housing.
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Welcome to a special edition of the Legal Pulse risk management report. I am Finley Maxson, NAR Senior Counsel. In this edition, we will review the findings from 2018 as well as some interesting cases from the 4th quarter.
The 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, and RESPA, and each quarter explores a different topic annually- this quarter, we look at Fair Housing. There is also an Executive Summary that provides a one-page review of this month’s research. The Legal Pulse and Executive Summary are available on nar.realtor for download.
First let’s look at the 2018 findings. Agency remains the top area of risk for real estate professionals with the most cases and regulations. The top issue addressed in agency cases involved breach of fiduciary duty, while the top issue for property condition disclosure cases was mold or water intrusion. Damage awards were down for property condition disclosure cases this year.
Now let’s look at some of the cases from the 4th quarter. A Texas brokerage was not vicariously liable for the actions of a salesperson who was involved in an accident when she collided with a motorcycle while driving her car, causing the motorcycle driver serious injuries. The brokerage argued that the salesperson was an independent contractor and so the brokerage was not responsible for her actions. The motorcycle driver argued that she was involved in brokerage activities at the time of the accident, making the brokerage liable for the injuries.
The court found that the evidence demonstrated that the salesperson was an independent contractor. The parties had entered an independent contractor agreement and there was no evidence demonstrating that the relationship was anything more, as the salesperson controlled her own hours and was paid by commission. The appellate court affirmed the lower court.
In another case, an Ohio appellate court affirmed a lower court ruling that real estate professionals had no duty to warn a visitor to the property about the danger of entering a utility closet. When visiting the property, one of the potential buyers had missed a step when entering the closet, causing her injuries. The court found that there was no evidence that the real estate professionals were aware of any alleged danger posed by the utility closet and so they had no duty to warn the potential buyers. Therefore, the court affirmed the lower court rulings.
Finally, the 4th quarter report also gathered fair housing information from 2018. Alabama enacted a law that allows a landlord who receives an accommodation request for an assistance animal and the requestor’s disability is not readily apparent can ask the requestor to produce “reasonable” documentation of the disability. There are also penalties for submitting false information to support the request.
For more insights on the Legal Pulse 2018 Year in review and 4th quarter report, visit the Legal Pulse page on nar.realtor. Thank you.