• Johnson & Johnson Law

Been There: Our Real Estate Malpractice Cases Against Agents and Brokers by Subject Matter

Over the last 18 years from both a plaintiff's and defense perspective, we've handled, reviewed, and advised on hundreds of real estate agent and broker malpractice claims. Our litigated cases have involved, among other things, the alleged failure to:

  • Identify property pins and boundaries;

  • Investigate restrictive covenants/failure to properly advise or refer for interpretation of restrictive covenants;

  • Verify buyer financial bona-fides and funds availability;

  • Disclose a property's location within a FEMA floodplain;

  • Disclose a property's history of flooding in the absence of floodplain designations;

  • Review or deliver seller's disclosure information;

  • Accurately market and investigate the existence of water and sewer service;

  • Advise or disclose on shared well issues;

  • Recommend follow up with appropriate professionals, including structural and geotechnical engineers, following review of a home inspection report;

  • Review a home inspection report;

  • Recommend a home inspection (in fact, we've had several cases involving realtor recommendations to actually forego an inspection altogether);

  • Communicate time-sensitive information within prescribed deadlines;

  • Identify water rights problems or refer for professional review;

  • Identify or communicate the existence of Controlled Groundwater Areas (CGWAs);

  • Accurately represent the breadth and applicability of "home warranty" coverages (they're worthless);

  • Obtain publicly-available information regarding a property's septic system;

  • Recommend inspections or otherwise confirm water flow in a low-flow area;

  • Confirm year-round, four-wheel vehicle access for a year-round residence (as opposed to by snowmobile, yes, unbelievably it happens);

  • Disclose the existence of tribal jurisdiction over water, sewer, and other property issues;

  • Disclose the existence of regulatory investigations or litigation regarding property use;

  • Disclose roofing problems (metal and asphalt);

  • Disclose well problems, including chronic flow and bacterial contamination;

  • Identify or disclose the existence of public rights-of-way within supposed property boundaries;

  • Verify square footage;

  • Verify usable commercial space relative to zoning regulations and parking allocations;

  • Identify or recommend investigation of mold;

  • Identify or recommend follow up regarding potential construction defects or structural concerns;

  • Appropriately draft contracts, including contracts for deed;

  • Identify or disclose prior expert reports regarding ongoing water, soils, or other geotechnical phenomena;

  • Disclose conflicts of interest between real estate agent and the inspector he or she recommends;

  • Identify a history of methamphetamine contamination;

  • Identify hazardous waste contamination;

  • Disclose the existence of unexploded military ordnance;

  • Disclose prior structural repairs, including helical pier installation;

  • Accurately identify zoning (for residential and commercial purposes);

  • Verify compliance with the Americans with Disabilities Act (commercial);

  • Accurately represent business assets or revenue;

  • Identify a history of sewer line collapse, backups, and other problems;

  • Accurately communicate receipt of earnest money or buyer intent to proceed;

  • Identify whether a particular property satisfied client requirements for a Section 1031 like-kind exchange;

  • Recommend disclosure and/or follow up regarding radon test results;

  • Accurately market business equipment contained in a commercial buy-sell;

  • Confirm that repairs have been performed in accordance with the client's Notice of Inspection (in at least one case, resulting in catastrophic personal injury);

  • Properly identify and then transfer grazing permits;

  • Properly identify and then transfer DNRC, BLM, and Forest Service leases;

  • Communicate with all principals to the transaction; and

  • Appropriately supervise agents and provide adequate oversight and education.

While we only handle consumer-side (plaintiff's) real estate litigation these days, keep in mind that we didn't file all of the foregoing cases; our experience includes the prosecution and defense of real estate malpractice claims. While extremely fact-dependent, the foregoing issues are often advanced in litigated cases through claims for violation of the Montana Real Estate Licensing Act and Montana Consumer Protection Act.


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