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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