AGENCY LITIGATION

Agency Litigation

There are few Realtors who work in the field of being an expert on real estate agency matters. Most do not know how to prepare a proper report for court and are not experienced in giving expert testimony. Not only have I appeared in court in hundreds of trials, I have worked with law students at two Canadian universities for mock trials as well as appearing in legal forums about vetting and expert witness and about how to work with an expert witness.

Agents get sued, that simple. Given the number of real estate deals done across Canada in a given year and the number of agents it is inevitable that some agents make mistakes or put their own interests above that of the public.

A good percentage of the approximately 600 trials that I have testified in since the 1970s relate to some aspect of agency.

 

Did the agent:

  • disclose all known material facts?
  • act in their own best interests?
  • make misrepresentations?
  • offer bad advice, such as not having a home inspection?
  • have conflicts of interest?
  • fail to verify facts from zoning to the past use as a marijuana grow operation?
  • did not carefully word the contracts?
  • not abide by the Code of Ethics of the real estate act?
  • commit fraud?

I have worked with some of the best litigators in Ontario and across Canada and the United States. Testifying as an expert is not a place for a novice.

When it comes to your future you want a professional with a past.

Legal references upon request.

For some research into the trials that I have done, use the website for the

Canadian Legal Information Institute and their link:

www.canlii.org/en

FAQS

I want to sue an Agent. What are the steps?

You have to ascertain if the agent is truly negligent or has committed something as severe as fraud.

All Ontario real estate agents are under the rules and regulations of the Real Estate and Business Brokers Act 2002 or REBBA 2002.

All brokerages, salespeople are governed by The Real Estate Council of Ontario (RECO). The first step is to have a carefully prepared report, after review of all documents and investigation in the facts, of the conduct of an agent or agents.

What Mistakes Do Agents Make?

There are many, some prepare sloppy paperwork. They do not check facts such as parking regulations or other zoning. Some do not investigate and clients find out that they bought on a floodplain or conservation land.

Some agents, in haste push clients to forego a home inspection resulting in finding horrendous problems upon taking possession.

Some agents hear facts such as the rumour that a property was a former marijuana grow op and do not disclose to their buyers.

Some agents cross the line with fiduciary responsibity to clients when in a multiple representation or dual agency situation.

And the list goes on.

There are few experts in this field. Barry Lebow is one of them

What About the Brokerage?

The person in charge of a brokerage is known as the broker-of-record and they are responsible for the actions of each person who works for them. Sue an agent and you must sue the brokerage, even if that agent moves to another or leaves the industry.

Is There Insurance?

Yes, all registrants in Ontario are covered by Errors and Omissions insurance. Certain litigation firms work for the insurors and are seasoned veterans of defending agents in negotiation or court.

What About Hiring a Lawyer?

The lawyer needed is a litigator but that lawyer should be familiar with real estate and Ontario agency law. Some lawyers work extensively in that area.

Is Suing Practical?

It depends on the amount of the claim. For small claims, up to $25,000 the best way is Small Claims Court. You may present yourself, but that is tricky. You may use a lawyer, that gets expensive or you may use a paralegal, which saves some costs.

For larger claims, you have to weigh the pros and cons. A lawsuit is expensive with litigators charging $500 to $700 (or more) per hour and then there is the extended period of actually getting to court, a system which is usually backlogged.

For claims up to say $50,000 more or less, it may be difficult but the costs to pursue may be impractical. Most litigators will give you a base consulting cost to discuss the merits of a case. Best advice, speak to a litigator, a lawyer who comes by recommendation.

Should I Report The Agent to RECO?

In theory yes, but being practical, no. A court case from the beginning to actually coming to court can take years. By then, RECO will not deal with an outdated complaint. The danger is in reporting an agent, then RECO does not set out a strong disclipine and their action is used in defence in court. If RECO does not clamp down on a registrant then the courts may take that into consideration.

What is the Difference Between a Broker and Salesperson

A broker can work on their own, a salesperson must work under a licensed brokerage. Many brokers do work for brokerages but that is their option. Becoming a broker in Ontario requires more education and the passing of examinations for broker status.

Are all agents Realtors?

No, Realtors are licensed members of real estate boards and have access to the MLS system. In Ontario, all Realtors belong to: 1) their boards, 2) the Ontario Real Estate Association and 3) the Canadian Real Estate Association. Non-Realtor brokerages do not have MLS privileges.

What Should Be in An Experts Report?

The report should be concise, reflect the actions of what a reasonable agent would have done. It has to set in precise terms the regulations of REBBA 2002 and the non-compliance.

A report can be two-fold, one about the conduct of the agent and the second phase measuring a loss in value. A property could be stigmatized, which was unknown when the offer was made. At that step, I do an analysis about the stigma factor or what is known as the diminution of value.

If the problems lie with costs to cure say extensive water damage then contractors quotes have to be obtained and the costs of other professionals.

Note: The answers herein are not to be considered independent legal advice or any other advice outside of the expertise of real estate transactions solely. Any party who wants to consider an answer herein should seek independent legal or other professional advice before proceeding.