Overview
Understanding Realtor Negligence
Real estate agents in British Columbia owe significant duties to their clients. When buying or selling what is often the most valuable asset a person owns, clients rely on their realtor's expertise, diligence, and loyalty. When a realtor fails to meet these standards, the consequences can be financially devastating.
Realtors have a fiduciary duty to act in their client's best interests. They must provide competent advice about market conditions and property values, disclose all material information they know about a property, avoid conflicts of interest, and follow their client's lawful instructions. A realtor who represents both buyer and seller (dual agency) faces heightened duties and risks.
Common examples of realtor negligence include failing to disclose known defects in a property, providing inaccurate information about a property or the market, failing to present offers or communicate material information, acting in a conflict of interest, and negligent advice that causes a client to accept a poor deal or miss a good opportunity.
Realtors in BC are regulated by the BC Financial Services Authority (BCFSA) and must carry errors and omissions insurance. This insurance provides a source of funds to compensate victims of realtor negligence. Our lawyers have experience pursuing claims against negligent realtors and their insurers to recover compensation for our clients.
Types of Realtor Negligence We Handle
- Failure to Disclose Property Defects
- Misrepresentation of Property Features
- Negligent Property Valuation Advice
- Dual Agency Conflicts
- Failure to Present Offers
- Breach of Fiduciary Duty
- Negligent Transaction Management
- Failure to Recommend Inspections
- Incomplete Due Diligence
- BCFSA Complaint Support
Pursuing a Realtor Negligence Claim
Case assessment
We review your transaction documents, correspondence, and the realtor's conduct to determine whether there was a breach of duty.
Damages calculation
We calculate your losses, which may include the difference in property value, repair costs, transaction costs, and consequential damages.
Insurance claim
We submit a claim to the realtor's errors and omissions insurance carrier and negotiate with their adjuster.
Litigation
If a fair settlement cannot be reached, we file a lawsuit and represent you through the court process.
Resolution
We work to resolve your claim through settlement or trial, recovering compensation for your losses.
Frequently Asked Questions
What duties does a realtor owe to their client?
Realtors owe their clients a fiduciary duty, which includes loyalty, disclosure, confidentiality, obedience to lawful instructions, and reasonable care and skill. They must act in your best interests, disclose all material information, avoid conflicts of interest, and provide competent advice. The listing or buyer representation agreement defines the scope of the relationship.
Can I sue a realtor for not disclosing a property defect?
Yes, if the realtor knew about the defect (or should have known) and failed to disclose it. Realtors have a duty to disclose 'material latent defects'—defects that are not visible on a reasonable inspection and that affect the property's value or make it dangerous or unfit for habitation. If the realtor misrepresented the property's condition, you may also have a claim for misrepresentation.
What is dual agency and why is it a problem?
Dual agency occurs when the same realtor (or brokerage) represents both the buyer and seller in a transaction. This creates an inherent conflict of interest because the realtor owes duties to both parties, whose interests are opposed. In BC, dual agency requires informed written consent from both parties. Undisclosed dual agency, or failure to manage conflicts, is a common basis for negligence claims.
Do realtors have insurance?
Yes. Realtors in BC are required to carry errors and omissions (E&O) insurance. This insurance covers claims arising from professional negligence, including failure to disclose, misrepresentation, and breach of fiduciary duty. The insurance provides a source of funds to pay damages if your claim is successful. We deal directly with insurance adjusters on behalf of our clients.
What damages can I recover?
Recoverable damages may include: the difference between what you paid and the property's actual value (diminution in value), cost of repairs for undisclosed defects, additional transaction costs (legal fees, moving costs, penalties), lost opportunity costs, and general damages for inconvenience and stress in appropriate cases. The goal is to put you in the position you would have been in but for the negligence.