It takes work to protect yourself against legal risk, but the effort is nothing compared to what you’ll face if you get sued. You’re better off putting in extra time and effort to reduce your legal exposure, Minneapolis attorney David McGee said at a Saturday risk management session during the REALTORS® Conference & Expo in Boston.
McGee’s tips for staying out of legal trouble include:
- Get familiar with the state laws that impact transactions and your business. Attend seminars, talk to other agents and brokers, and be prepared to change what you do if you’re not doing it the right way.
- Document everything in an email, and organize your emails so you can find them easily. They take little space, so there’s no reason to purge them. States differ on how many years to keep them on hand. McGee tells his clients to save them for six years.
- Stay within your area of expertise as a real estate agent. Don’t weigh in on building or remodeling issues, legal requirements, inspections, or other matters that put you at risk. Refer customers with questions to other professionals or government agencies, and document those referrals.
- Disclose. Failure to disclose remains the number one cause of legal action against agents. There is no close second. Know what your state requires. Of course, in your effort to disclose, protect confidential client info.
- Avoid overly complicated deals. Few transactions need to be complicated. If you’re presented with a multi-tiered scheme involving third parties and unfamiliar financial structures, you’re better off turning down the opportunity.