Professional Liability for Realtors and Real Estate Brokers


Many professional services providers devote a large portion of their adult lives to obtaining specialized education and corresponding licenses and certifications. When professionals such as realtors and real estate brokers become the subject of allegations of professional negligence, their careers and livelihoods are put at immediate risk. Our team of experienced lawyers counsel those in need regarding professional liability for realtors and real estate brokers. We have 75 years of experience handling complex matters throughout Texas and beyond and have a sophisticated understanding of the unique issues presented in professional liability disputes.

Real estate agents owe contractual and fiduciary duties to their clients. If agents, realtors, and/or brokers are alleged to have breached these duties, they can potentially be held liable for damages and their careers can be permanently affected. We represent real estate agents and brokers in all aspects of litigation and regulatory matters, including buyer and seller disputes and matters alleging breach of fiduciary duty, fraud, negligence, failure to disclose, and other such allegations. We also regularly assist real estate agents and brokers in regulatory and enforcement and disciplinary proceedings at both the local and state levels.

Lawsuits Against Real Estate Professionals

The complex, high-stakes real estate market can be a fertile area for litigation involving the services of real estate agents, brokers, appraisers, title companies, and even attorneys. Our lawyers defend real estate professionals in controversies that involve allegations of misrepresentation, failure to disclose property or financing defects, and failure to uncover title problems. Most of the properties at issue are valued anywhere from the hundreds of thousands to many millions of dollars. Our lawyers defend clients in proceedings before the Texas Real Estate Commission and the California Bureau of Real Estate, in Texas trial and appellate courts, and in mediation and arbitration actions.

Among the many potential allegations that can be made against real estate professionals, some of the more common claims we see include:

  • Misrepresentation: If a real estate broker furnishes false information to others involved in the transaction or misstates material details about the property, they can be held liable for resulting losses caused by justifiable reliance on the information, whether oral or written.
  • Negligence: All agents and brokers owe a duty of care to use their skills and competence to benefit their clients. If they fail and the client suffers a loss, the agent can be held liable for the resulting damages. Part of their duty involves the obligation to independently verify information their clients will rely upon in determining whether to purchase a property.
  • Lack of disclosure: While similar to misrepresentation, when a real estate broker fails to disclose a property defect completely, a buyer will tend to blame this failure to disclose for the resulting issues even though the buyer should hire their own inspector to independently assess the property.
  • Secret profits: A real estate agent cannot make secret profits or obtain financial benefits from anyone other than their client (including payments from the other party or parties involved in the transaction or a third party) unless they obtain their client’s informed consent in writing.
  • Conflicts of interest: When an agent seeks to buy a client’s property or purchases a property in which their client is interested, it may create a conflict of interest. In addition, if a brokerage firm or agent is acting on behalf of both parties in a real estate transaction, they must disclosure this fact and obtain the informed consent in writing of both parties to the dual agency.
  • Breach of fiduciary duty: The professionals must act in the best interests of their client and not act in their own self-interest or for personal gain.

Alleged real estate ethics violations exemplify why realtors and real estate brokers should carry errors and omissions insurance designed to cover financial losses resulting from their actions or inactions. Even if the agent is ultimately not found liable, the legal defense alone could cost them tens of thousands of dollars; and, if they are found at fault, the full costs can vary widely depending upon the value of the transaction.

Texas Real Estate Professional Liability Defense Attorneys

With experience in all aspects of professional liability defense, MehaffyWeber attorneys are experienced in handling sensitive, confidential issues, understand the impact of the case on ongoing business, and will work closely with each client to develop an appropriate and effective claims resolution strategy.