Real estate brokers are professionals who are licensed by the state and are authorized to assist clients with real estate transactions. As such, they are bound by very specific codes and standards of professional conduct. Many of these laws deal with preventing fraud in a real estate transaction.
Generally speaking, real estate broker fraud occurs where the broker makes misrepresentations regarding key elements of the sale. The fraud can also involve misinformation about the brokers themselves (such as their credentials). Broker fraud is one of the most common legal issues when it comes to real estate cases. Broker fraud that is incorporated into an entire company’s practice is often called brokerage fraud.
What Are Some Examples of Broker Fraud?
Some common examples of broker fraud include:
- Breach or misrepresentation in a broker agreement contract
- Foreclosure listing scams
- Failure to follow full disclosure requirements
- Making misrepresentations of the property’s dimensions, age, previous ownership, etc.
- Using fake licenses or credentials
- Delegating work to other parties without the client’s permission, especially if such decisions negatively affect the client
Broker fraud is often varied in a way that depends on local geographic conditions. For instance, in an area that is subject to flooding, broker fraud can involve misrepresentations regarding the flood conditions in the area or regarding flood damage to a home.
What Are the Consequences of Broker or Brokerage Fraud?
Broker fraud can lead to serious legal consequences. Home and commercial real estate transactions can involve large amounts of money; fraud can therefore cause a party to lose very significant investments. Consequences for fraud may include:
- Damages awards to plaintiffs to help them recover losses
- Loss or suspension of real estate license
- Monetary fines
- In some cases, criminal charges may be involved
Do I Need a Lawyer for Help with Real Estate Broker Fraud?
Broker fraud can lead to significant financial losses, and losses of property transaction opportunities. You may wish to hire a real estate lawyer if you need help with any real estate issues. Your attorney can help represent you during negotiations and during any type of court hearing or meeting. Also, your attorney can perform research on the property as well as any broker personnel for more background information.