Q3 2016: Agency, PCD, RESPA, Technology and Third Party Liability

This edition of the quarterly report analyzes legal trends in risk management areas that affect real estate professionals: agency, PCD, RESPA, technology, and third party liability.

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In This Issue

The Agency cases from this period address issues that we frequently see in this context, such as whether an agency relationship existed, whether a licensee was an employee or independent contractor, whether a broker could be liable for the negligence of a licensee, and the duty owed by a licensee.

A.         Cases

1.  ...

In two of the PCD cases below, the courts examined the disclosure rules governing real estate transactions in their respective states. In a case from Michigan, the court held that the disclosure rules require disclosure only with respect to conditions of the property. In a Florida case, the court concluded that a licensee must abide by statutory disclosure rules even if the language of a...

In the RESPA cases discussed below, the borrowers failed to show that the lenders and other entities paid or received kickbacks or other improper fees.

A.         Cases

1.         Schiano v. MBNA, No. 5-1771 (JLL), 2016 WL 21257761 (D. N.J. Aug. 10, 2016); ...

Many of the Technology case decisions this past year involved text messaging. In two decisions, both from Massachusetts, the court considered whether a real estate transaction may be completed through the exchange of text messages.  Another case involved an alleged Telephone Consumer Protection Act violation by a licensee who sent a text message. One case involved allegations of copyright...

The third-party liability cases from the past year addressed claims against inspectors, appraisers, and escrow agents. A central question in these cases is whether the third party owed a duty to the party asserting a claim. In the cases below, the escrow agents did not owe a duty to the plaintiffs; home inspectors and appraisers did not fare as well.

A.     ...

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State Law Based Changes

NAR's State Law Based Changes is a compilation of new types of laws collected over the past few years. This resource is helpful to guide states that may want to adopt similar laws in their state.

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