Buying a house is a very personal matter for both the buyer and the seller. Parties often rely on the expert help of a real estate professional in order to navigate the often confusing ins and outs of the process. What happens when that relationship turns sour? Consider the following.

A young couple is house hunting for their first house — in hopes of getting a fixer upper they can make their own. They purchase an updated property that showed no clear signs of termite damage. The house they purchased was advertised as a “handyman” special. After closing, the couple immediately started on repairs they expected to be mostly cosmetic. When remodeling the living room, they took down drywall and found prior termite damage. The couple filed suit against the sellers, the seller’s agent and their own agent for failing to disclose information.

That’s just one of many examples of situations in which real estate professionals can find themselves in hot water. Knowing the most common ways real estate agents get sued, and how to protect your clients from lawsuits is essential.


Failing to disclose a property defect

If clients find defects in the property after signing the papers, they can be quick to blame the agent. Encourage your clients to perform a thorough inspection on each property and document every bit of damage.

Giving legal advice

Clients often expect that their real estate agent has the answer to every question they ask. On the same note, agents want to help their clients to the best of their ability. However, it is important to remember that most states consider it illegal for a real estate agent to give tax or legal advice.

Misleading clients

It’s natural for agents to want to make their property stand out from the crowd. Agents may feel the urge to exaggerate about certain features the house may have, or the condition of the property itself. Explain to your clients that they should not exaggerate about features or conditions of the house when selling the property.

Failing to keep your clients’ data safe

Hackers want personal information. If they get it — your client will be the one who pays. Install security software and keep paperwork in a secure place in order to avoid data breaches. Additionally, make sure to encrypt data and change your password frequently. 

Failing to recommend inspections

Buyers trust the opinion of a real estate professional, but often times there are things agents may not know about the property. Make sure your clients recommend that buyers get inspections before purchasing a property.

Bodily injury

If agents are found liable for an injury a client sustains at a showing, they will be responsible for reimbursing any accident-related costs. Before showings, make sure debris is picked up and any snow or ice is shoveled and melted.


Your clients should know that there are ways they can protect themselves from financial loss resulting from claims. Real estate professionals should be covered by an errors & omissions policy to protect themselves and their business. The experts on ASL’s professional liability team are here to help you and your clients find e&o coverage that fits their needs. Contact a member of our team today!



Midwest and Mid-Atlantic —

Florida and South Central — Nicole Comer,



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