Broker Liability Litigation for Civil and Enforcement Lawyers
The level of anti-consumer and anticompetitive residential real estate practices is at an all-time high. Real estate licensing laws that got their start in consumer protection have mutated into laws that protect the industry that they were designed to regulate. Abound are laws that legalize previously illegal conduct, laws that prevent consumer class action lawsuits, and laws that seem to encourage deceptive and unfair business practices. These so-called licensing laws have provided Realtors with a false sense of immunity from lawsuits and may have created a trail of liability that exceeds those protections.
As an example, a remedy often available in undisclosed dual agency cases (common law fraud) is a rescission. Imagine the potential a rescission remedy might have for a foreclosure defense lawyer whose client was a victim of the undisclosed dual agency. If the lawyer could prove that the client was subjected to the undisclosed dual agency, the liability could be shifted away from the client and on to the real estate brokerage that sold him the house. By third partying the brokerage into the case, the lawyer could provide his client with a treasure trove of client remedies.
All lawyers who have a cause of action against a real estate brokerage should first do a fiduciary analysis to determine if advantages exist such as the extension of the statute of limitations, the burden of proof shifting, fee forfeiture, rescission, criminal prosecution or punitive damages.