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Honesty and transparency are vital for real estate agents. They ensure that you build a good relationship with your clients, and you have the responsibility to guide them on all matters concerning their property.
But what happens when there is property damage? In that case, you must take on an advisory role and become a trusted advocate for them. You must be in your client's best interests & ensure you uphold the highest ethics standards. Here, we'll expound more on how you can advise clients on property damage and legal recourse.
Disclose defects
As a real estate agent, you have a moral obligation to act in your client's best interest. Therefore, disclose all known property defects—before the sale is complete!! *Note that this is not just a moral duty—but also a legal one.
Under common law, you must disclose any material defects you know. These material defects can impact a buyer's decision/the value of the entire property. Therefore, you have to inform your clients of this. Or you will be liable for misrepresentation or fraud.
Find a lawyer to help you understand the different types of property damage
This tip will help you to advise your clients effectively. Make sure you know the common types of damages,--which may include;
- Environmental hazards (lead paint and asbestos)
- Plumbing or electrical issues
- Mildew and mold
- Water damage (flooding, leaks)
- Structural issues (roof damage/foundational issues)
Knowing the above can help you identify potential issues. According to property damage attorney, Andrew Vargas, understanding the different kinds of property damage that can exist will help you guide your clients accordingly and know whether this is an issue that requires to be addressed by an attorney. For instance, if there are water damage problems in a specific property, you can help your clients seek help from the best property damage attorney. This action will help protect them from suffering any losses.
The lawyer can help your client negotiate with insurance firms, allowing them to enjoy fair compensation.
Emphasize the importance of an inspection
I always recommend that home buyers perform an inspection before finalizing the purchase process. While this may involve an upfront cost, it can prevent many headaches.
In addition, the inspection will help reveal issues that you cannot see during a casual walk through the property. So, ensure that you advise home buyers to consult engineers to fully understand the state of the property!
Advise clients to document everything
Encourage your clients to have detailed records about any property damage. These may include:
- Photographs and videos
- Written descriptions of the damage
- Dates when they discovered issues
- Any communications with the seller, inspectors, or contractors
All these can come in handy—when legal action is necessary. They will provide evidence and support your client's claim to insurance companies. Moreover, the above information will help protect clients from conflicting information.
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Outline any potential legal recourse
If your client notices property damage after the sale, they may have the following legal options:
- Negotiating with the seller for compensation or repairs
- Filing a claim against the seller for failing to disclose known issues
- Pursuing action against home inspection professionals if they were unable to notice apparent defects
Note that your client has a right to seek a negligence claim if they spot any of the above issues. So, advise them to consult a real estate lawyer for help.
Advise your clients about their rights
Most homeowners must be aware of their rights in case of property damage. So, as a real estate agent, you have an ethical duty to educate property owners about their rights and responsibilities!! Ensure that they are aware of relevant regulations and laws, such as;
- Safety regulations
- Disclosure requirements
Explain insurance options
Help your clients understand their insurance options. Also, advise them to review their insurance policy carefully. For instance, if their policy covers fire, they can file for compensation based on this.
However, it does not mean they cannot receive any compensation. So, make sure you explain all insurance options that your clients may have before they go to seek a claim. Another thing that you can do is to ask them to consider additional coverage for specific issues in their area, like:
- Flood insurance in the coastal regions
- Fire insurance in areas that often experience wildfires
Bottom Line
Following the above tips will give you the necessary knowledge to guide your clients through property damage and legal recourse. Remember that you must be an advisor. So, be as transparent and honest as possible when handling your clients. This can help you navigate property damage issues and protect your liability as a real estate agent.
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