Standard of Care: Realtors Brokers and the Consumer Fraud Act
The standard of care is the measuring stick by which realtors are judged by both their peers and the public.There are both industry accepted standards and written rules pertaining to the conduct of realtors.There is a host of administrative rules and regulations pertaining to realtors which apply to advertising, contracts for sale and leases, broker insurance, obligations of licensees to the public and to each other, residential, rental, referral agencies, participation in trade associations, disclosures pertaining to mortgage financing, disclosure of affiliations and consumer information statements.
Probably the most common applicable standard to the average person either buying or selling a house is the obligation of a licensee to the public and to each other.It is clear that a realtor owes certain obligations to their client as well as to the other customer.The agents are required to comply with the state laws and the principles governing fiduciary duties.More importantly, each licensee is required to make reasonable efforts to ascertain all material information pertaining to the physical condition of every property for which they are accepting an agency. The Administrative Code specifically sets forth the definition of a reasonable effort, which includes at least inquiring of the seller or agent about physical conditions and visual inspection of the property if there are any readily observable conditions.The Administrative Code defines material if a reasonable person would attach importance to its existence or non-existence in deciding whether or not in the fashion in which they proceed with the transaction.There are also various provisions with regard to disclosure of off-site conditions.
As previously set forth both a realtor and the broker realtor have an ethical obligation with regard to full disclosure and clarity with regard to the terms and conditions of the transaction. They’ve an ethical obligation to their client. Realtors have an ethical obligation to the other realtor and the adversary. This ethical obligation is not the seller from an ethical obligation of an attorney to his client and the ethical obligation of an attorney to his adversary. While they are not necessarily partners they certainly have an obligation with regard to full and fair disclosure with regard to another realtor.
The issue of dual disclosed agency is foreign to me as an attorney and that how is it possible that a realtor can potentially represent the seller and disclosure fairly. Nonetheless, a power for realtor lobby has managed to make sure that this exists in the realtor and real estate industry.
So if you have a realtor your realtor must divide complete and honest disclosure to the other realtor. The same is true of the other realtor, in so far as the other realtor has an obligation for full disclosure and honesty to your realtor. Full disclosure is required. Material omissions of fact are not permitted or tolerated. Realtors are subject to civil penalties in the context of the consumer fraud claim with regard to material misrepresentations of fact and material omissions of fact