As a real estate agent, you must walk a fine line between doing all you can to promote the interests of a seller and misrepresenting the property to a buyer. Misrepresentation occurs when you provide misleading or outright false information about a property, intentionally or unintentionally, to a buyer.
There are several ways this might occur, and the consequences for agents who engage in misrepresentation can be significant. The right legal support can help you address such allegations, but if you don’t want to find yourself in need of real estate license defense, it’s important to understand what constitutes misrepresentation and how to avoid it.
Types of Misrepresentation Allegations in Real Estate
Accusations of misrepresentation could be as mild as making uninformed claims or as serious as outright lying about something that might constitute a health or safety issue. Any allegation or accusation can affect your real estate license. These accusations are broken down into three main categories: innocent, negligent, and fraudulent misrepresentation.
Innocent
Even a relatively innocent claim that turns out to be false could leave you in need of professional real estate license defense. This type of misrepresentation occurs when you share false information without any intent to mislead, or if you make claims based on available information that is later revealed to be untrue.
Innocent misrepresentation is generally characterized by a reasonable belief that the information being given is accurate. For example, an agent might provide a quote for the square footage of a property that is based on outdated information, or tell the buyer the roof has been replaced when it was only repaired, based on a misunderstanding of the work completed.
Negligent
Negligent misrepresentation can occur when real estate agents unintentionally provide false information because they fail to verify the facts. For instance, an agent might say that a property is zoned for commercial use or livestock when, in fact, it’s only zoned for residential use.
This is something a seasoned agent should probably know to verify if a home is in a largely residential area.
Fraudulent
This is the most serious type of misrepresentation. It occurs when an agent intentionally provides false information to make a sale, knowing that the sale likely wouldn’t happen if the buyer knew the truth.
In any profession, there is a legal duty to follow the law and an ethical duty to do the right thing. Fraudulent misrepresentation fails to comply with both sets of standards.
Misrepresentation vs. Puffing
Anyone involved in sales is aware of puffing, or exaggerating to make a sale more appealing to buyers. Puffing involves opinions and suggestive statements rather than patently false claims. In a real estate agent’s case, that might mean puffing up a property by saying it’s “the nicest house in the neighborhood” or characterizing it as an “urban oasis.”
The intent is to evoke a psychological or emotional response. These claims cannot be proven or disproven because they’re not quantifiable or based on objective fact, so they don’t fall under the category of misrepresentation.
Potential Consequences of Misrepresentation Against Your Real Estate License
When buyers feel that they purchased a property because material facts were misrepresented — leading to a purchase that wouldn’t have happened otherwise — they may elect to file accusations claims. Potential consequences could include damages meant to reimburse the buyer and rescission, or canceling the contract.
In addition, agents found liable for the accused claims may face professional disciplinary action, such as license suspension or revocation, that requires professional real estate license defense to fight. Consequences may depend on the severity of misrepresentation, the intent of the agent, and past instances of misrepresentation.
How to Avoid Claims of Misrepresentation
While a solid real estate license defense can help you address misrepresentation claims, it’s best to avoid misrepresenting a property in the first place whenever possible. This starts with informing sellers of disclosures they’re required to make so that you have accurate information for buyers.
Keeping detailed records of interactions with sellers, buyers, and other involved parties is also important to protect yourself against claims. Perhaps the most crucial step, however, is practicing due diligence. Always double-check to make sure the specifications for the property listing are accurate.
Call a License Defense Lawyer Today
When you are facing a lawsuit, complaint, or disciplinary action related to a misrepresentation claim, the best thing you can do is seek professional help from a professional license defense lawyer with experience in real estate license defense.
If you need legal guidance and support as you navigate a misrepresentation claim that threatens your professional license in California, turn to the professional license defense team at S J Harris Law. We can help you develop the right legal strategy for your California Real Estate License case. Contact us now to schedule your consultation.
