Today I sat through a class on legal topics for realtors in 2016. The class was hosted by a real estate lawyer Scot Peterson. Scott has taught the same class to all 34 realtor associations in Colorado. The topics were decided because they are the most common topics they receive calls to their legal hot line for from other real estate professionals. Please read below and share with anyone you know in real estate.
Cyber Crime. With technology in every facet of our lives, real estate is no different. We are seeing more and more cyber crimes in real estate. These vary in nature but usually affect the client and the broker both. Sometimes people steal realtor info and than ask clients to wire them money. Sometimes people pretend to purchase property and demand earnest money be paid in cashiers check. These are just a couple of the many possible cyber crimes in real estate today. To protect yourself, setup Google Alerts.
Variable Commission Structures. The big idea here is that agents are not disclosing the fact they are working on a variable commission basis. This can be a huge risk for the transaction and the client. Basically the code of ethics requires sellers agents to disclose this information so it can be easily verified.
Marketing Services Agreement. This used to be very common with realtors, lenders, title companies and other who team up for marketing efforts. Since than there have been several high dollar lawsuits. With the knowledge of the crack down, we are seeing less and less marketing service agreements being signed.
Earnest Money Disputes. In real estate there are many ways a buyer can back out of the contract and request the return of their earnest money. This is a two part process. The first is contract termination which is unilateral in nature. The second is the earnest money request which is bilateral in nature and requires both parties to sign. When an earnest money dispute arises, be sure to work with your realtor and possibly legal counsel to get this resolved.
Use of Social Media. There is no doubt social media marketing is often times successful. Almost all real estate professionals use social media today for their business. As a realtor you are required to have your firm name and contact immediately verifiable in posts. Lots of violations are occurring with respect to this. When advertising on social media be sure to include all the necessary info to legally market yourself and your properties.
Service animals and emotional support animals. There is a difference between the two. Service animals are always a dog and trained for 1 skill set and directly benefit their owner. Emotional support animals can be any animal and are more vague in nature for what they actually do. The big thing in real estate is that because of fair housing regulations, you cannot deny a tenant based on the fact they have a service animal or emotional support animal.
Appraisal Contingency. This is related to FHA and VA loans. If the seller gives the buyer a VA or FHA loan contingency, they are waiving the rights of the appraisal contingency. This is not always discussed but very important to real estate.
Disclosure of Known Conditions. The real estate commission position 46 was written just for this. As a realtor or property owner you are required to disclose all latent and known defects to a property before sale. If a buyer comes along and performs an inspection and withdrawals the offer based on inspection results, you are required to disclose that to any future buyers. This is obviously for the protection of the buyer. Many realtors and sellers are not adhering to this therefore creating a violation.
Evictions. These are not fun for anyone involved but are very common. When evicting a tenant you must provide a notice to quit and than have the sheriff evict them after 3 days. This usually goes to legal proceedings and takes at minimum a few weeks to resolve. To protect your sellers, be sure to stay ahead of the eviction process when applicable.
You can find more information at www.coloradorealtor.com/legal-hotline
Thanks for reading and sharing my column today on Legal Topics for Realtors. I hope to hear from you soon when you are ready to enter the real estate market!