If you could change one thing about your practice to reduce your liability in transactions, what would that be?
Post closing demand letters sent by attorneys consistently name, quote, paraphrase REALTORS who touched the transaction. The more the merrier. Copies of correspondence make useful written evidence to tie someone to something the lawyer contends contributed to her client’s loss. Same goes for lack of evidence.
The financial demand for curing conditions affecting real estate after closing are rarely less than the commission paid to the firm representing the offending party. This liability lasts long after the closing. We can’t avoid the liability, but we can eliminate risk by incorporating a fundamental standard. This is it: Let buyers and sellers tell each other exactly what they want to tell them by using an amendment, notice, or an email. Let them answer the questions, and don’t pose questions to them unless it comes in writing in an amendment, notice, or email.
Before committing yourself to carry water for one of the clients, ask yourself this question: Do I have the client’s position relative to this situation in writing? “No” answers are red flags. If something needs to be said, decide who needs to say it, (it’s not going to be you) and then assist them in stating their position in writing. Then, add no color commentary.
The material adverse fact form tells us to just state the facts. No opinions. Just facts. The material adverse fact form is a great way for us to document what we saw and what we are willing to stand behind. Amendments to listing contracts, and buyer agency contracts are another useful tool to document.
I know licensees want to help and expedite. If a client wants us to pass something along in a phone call or email or conversation, it’s a safe practice to pass on that opportunity and let the message, question, comment be in the client’s words on paper and preferably signed by them. When the unexpected happens, expect to be safe. Keep agreements and representations in writing—between the parties.