Avoiding Misrepresentation Claims During the Sale/Purchase of a Home

Avoiding Misrepresentation Claims During the Sale/Purchase of a Home

When it comes to buying or selling real estate, one of the most common legal disputes that can arise are misrepresentation claims. In fact, misrepresentation of a property’s condition is among the top legal claims real estate brokers and agents face. Misrepresentation occurs when false information or statements are made, either intentionally or unintentionally, that affect the decision-making process of the buyer or seller. This includes the intentional or unintentional failure to disclose defects. In real estate, misrepresentation can involve various aspects such as the property condition, history or value.

For instance, a seller may exaggerate the features of a property in order to attract buyers. Alternatively, a buyer may misrepresent their intentions or financial situation to secure a lower price. Both scenarios can lead to disputes and legal action if discovered.

Real Estate professionals have a duty to disclose all known defects and/or property conditions that may impact the buying decision. Examples include structural issues, water damage, mold, etc. To reduce the risk of being involved in a misrepresentation claim, professionals should insist that condition reports be fully and accurately completed by their client. If a defect is revealed after the initial condition report is completed, the seller should update the report right away. If a client refuses to complete questions regarding a defect the agent is aware of, it is best practice for real estate professionals to make the disclosure themselves. That said, agents should never complete a real estate condition report on behalf of the client.

Misrepresentation claims in real estate can be complex and may require legal action to resolve. The consequences of misrepresentation can be severe and result in financial loss and a damaged reputation. It is therefore crucial for all parties to be transparent and truthful during the buying and selling process. Real estate professionals and clients should be aware of the potential risks of misrepresentation and take measures to prevent it. This includes obtaining accurate information and disclosing any known issues or limitations. By doing so, both agents and clients can ensure a fair and transparent transaction, ultimately leading to a successful outcome for all parties involved.

If you are being threatened with litigation related to misrepresentation in a real estate transaction, seek legal advice as soon as possible. A qualified attorney can help you understand your rights and options, and work to protect your interests.