A real estate agent friend recently shared with me a great article that ran in the November/December REALTOR Magazine. The article, entitled Can You Change That Contract, can be found here:
The article hits on an issue of which many agents struggle. As an agent, it is illegal for you to act as a lawyer in any capacity in the transaction, including providing legal advice or explanations to legal questions. Many agents cross this line by writing or changing contract provisions, defending or prosecuting their clients’ claims concerning matters such as undisclosed property damages and by providing general legal advice.
Agents need to be very careful not to cross the line by changing the contract or adding lengthy provisions. The REALTORs Association has spent significant resources creating the contract and other documents that all real estate agents should be using in their transactions. These well-written documents should rarely require modifications. The agent should only act as scribe and enter information in the blanks found on the contract and other documents. If an agent needs to add or significantly change a provision, the agent should contact the closing attorney for the correct contract language. Not only will doing so save the agent from illegally practicing law, it will also lessen the agent’s liability that occurs from poorly-worded provisions.
If a client comes to be in a dispute with the other party in a transaction, the agent should guard against taking on the role of the attorney. The agent can provide information to the other party or their agent, but should be careful not to cross the line by making legal arguments or demands. Frankly, I don’t understand why any agent would want to get tangled in the mess. All that it takes is simply reminding the client that you are not their attorney and referring them to a licensed attorney for assistance. As a Broker friend once said to her agent, “know your lane and stay in it.”
BLAIR CATO is happy to announce that our engagement letter is now available online. In the past, your client was emailed a PDF form to print, complete and sign. Now your client will receive an email with a link to the form and engagement letter. Your client will be able to complete the form online in about 3 minutes on their mobile phone, pad or computer.