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When is real estate broker misrepresentation a violation of the law?

by | Apr 29, 2021 | Real Estate Law |

Whether you’re purchasing a property for yourself or as an investment, you probably depend a great deal upon the real estate broker’s descriptions and presentation of the property when making your decision. The importance of real estate brokers’ representations to the real estate market is why there are laws in place to prevent them from providing blatant misrepresentations in order to make a sale. But where is the line that separates mere expressions of opinion with illegal representation?

Disclosure requirements

The most common form of misrepresentation that real estate brokers commit is done by omitting information that the law obligates them to tell any potential buyer before they sign the sales contract.

The types of things that brokers must disclose to you before you buy the property include:

  • Foundation and structural damage
  • Problems with the plumbing or electric systems
  • The presence of mold
  • Any pest infestation, especially termites

If you purchase a property, and subsequently discover that the property has one of these defects, you might be within your rights to bring a lawsuit against the seller or broker. You could seek restitution of your money and rescission of the sale contract, or you could sue for compensation for damages that the lack of disclosure caused.

What you need to prove in order to win

The success of your case will depend upon whether your attorney can prove that the broker actually knew about the issue and willingly concealed it from you in order to make the sale.

If the broker genuinely did not know about the issue until after you both signed the contract, then they did not violate the law. If they did know about them, and failed to disclose them, then you will likely prevail in your suit.

Real estate is a huge monetary commitment, and it can be extremely frustrating to find something that devalues your investment. With the right type of lawsuit, you might be able to recuperate some or all of the money you lost due to undisclosed defects.