1.  Why is it so important to document your files, keep notes, and maintain records? When you are sued by your clients possibly years after the transaction and they have selective memory—this way you have documentation on the advice and counsel you gave them (admissible evidence). It also helps you remember what you did and what you said. Pride of authorship (specificity) is the key. Use confirming letters, “chron logs,” emails, mobile phone logs, etc. Get key points in writing and do so before escrow closes. Treat your files as if you will get sued. Recognize that the statute of limitations for fraud (in California) is three years and four years for breach of fiduciary duty; both from the date of discovery.

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Sometimes the past is one of the best learning tools around! Use the following Real-Life Errors & Omissions Claim Situation involving discriminatory practices to avoid a similar legal showdown happening to you in your everyday real estate career. And be sure to have a good Real Estate E&O Insurance policy in place to protect you in case you find yourself in the middle of a court battle over discrimination.

A Real Estate agent was hired by a landlord to lease a two-story townhouse that had one bedroom on the first floor and two bedrooms on the second floor, which was also where the only full bathroom was located. The first applicant to view the property informed the agent that his wife was physically disabled and would require accommodations so that she could access the second floor bathroom. He informed the agent that he was willing to make arrangements to have a chairlift installed and provided the required security deposit together with the fee for a credit check.

Problem
Despite the fact the background check revealed that the applicant had an excellent credit rating, the landlord refused to rent the apartment because he did not want the applicant to install the chairlift or otherwise make physical changes to the property. He instructed the agent to inform the applicants that he decided to lease to someone else, even though
there were no other applicants.

Mistake
When the agent conveyed the intentions of the landlord, it was a clear violation of Title VII of the Civil Rights Act of 1968, as amended by the Fair Housing Act of 1988.

Result
The applicant sued the landlord and the agent alleging that they discriminated against him and his wife when they were denied the opportunity to lease the property because of her physical disability. Their allegations were bolstered by the fact that the rental unit remained vacant for nearly four months after being informed that it was leased to someone else.

Moreover, the eventual tenant testified that she became interested in the property at a date later than the complainants. After incurring thousands of dollars in legal fees, the case settled on behalf of the agent without the agent admitting liability.

Prevention
Prohibited practices that lead to fair housing claims include the refusal to rent, lease or negotiate; offering different terms or affording different treatment; keeping records describing clients/customers; and failing to make reasonable accommodations. Providing equal service to all and not making assumptions of your client’s preferences will reduce the possibility of discrimination claims. And, as evidenced in this case, working with a discriminatory landlord can lead to claims alleging civil rights violations.

Do you have a similar story involving complaints regarding possible discrimination or questions on discrimination to share with us? Send us your learning experience or just let us know what you think about this one! Just leave a reply below!

If you have any questions about Pearl’s Errors & Omissions Insurance for real estate professionals, give us a call at 800.447.4982—whether you’re looking for a new E&O policy or have questions about your current one. We’d love to hear from you!

You can also visit www.pearlinsurance.com/eo to find out more about our quality Errors & Omissions program, including policy features, risk management tools, and much more.

If you think discrimination in real estate is a thing of the past, you may want to think again. Read this The New York Times article on a real-life case of discrimination that happened recently in two Bronx neighborhoods. We hope you’ve enjoyed reading our risk management tips and resources for April – Fair Housing Month. Be sure to remain diligent on managing your risk and avoiding legal issues by following the National Association of REALTORS^® Code of Ethics and having a quality Errors and Omissions Insurance policy in place—like those offered by Pearl Insurance!

Sometimes the past is one of the best learning tools around! Use the following Real-Life Errors & Omissions Claim Situation involving discrimination to avoid a similar legal showdown happening to you in your everyday real estate career. And be sure to have a good Real Estate E&O Insurance policy in place to protect you in case you find yourself in the middle of a court battle over fair housing regulations.

A real estate agent was hired by a landlord to lease a single-family home. In response to a newspaper advertisement, a woman called the agent and made arrangements to see the property. Satisfied that she and her family would be comfortable living there, an application was completed and submitted with a deposit.

Problem
Despite the fact that a background check revealed the applicant was gainfully employed and had an excellent credit rating, the landlord instructed the real estate agent to ask for more rent than advertised after learning the woman had five children.

Mistake
When the agent conveyed the intentions of the landlord in an email, it was a clear violation of Title VII of the Civil Rights Act of 1968, as amended by the Fair Housing Act of 1988.

Result
The applicant sued the landlord and the agent alleging familial discrimination against her and her children when they were denied the opportunity to rent the property for the amount advertised based solely on the number of children. In the face of damaging email evidence, the agent’s attorney had no alternative but to stipulate that a technical Fair Housing Act violation took place. Left with no viable defense, the case was resolved with a relatively substantial monetary payment.

Prevention
Prohibited practices that lead to fair housing claims include the refusal to rent, lease, or negotiate; offering different terms or affording different treatment; keeping records describing clients/customers; and failing to make reasonable accommodations. Being familiar with the laws while providing equal service to all will reduce the possibility of discrimination claims. Working with a discriminatory landlord can lead to claims alleging civil rights violations—especially if one doesn’t know or realize that a violation is taking place.

Do you have a similar story involving fair housing and discrimination to share with us? Send us your learning experience or just let us know what you think about this one! Just leave a reply below!

If you have any questions about Pearl’s Errors & Omissions Insurance for real estate professionals, give us a call at 800.447.4982—whether you’re looking for a new E&O policy or have questions about your current one. We’d love to hear from you!

You can also visit www.pearlinsurance.com/eo to find out more about our quality Errors & Omissions program, including policy features, risk management tools, and much more.

In honor of Fair Housing Month, we’d like to share some excellent resources for avoiding any kind of discrimination in your career. First, the U.S. Department of Housing and Urban Development has an entire section on their website devoted to the topic at www.hud.gov/fairhousing. There, you will find HUD’s brochure, 39 Steps Toward Fair Housing, which offers a timeline of the key moments in the history of Fair Housing in the United States, or HUD’s newsletter, Fair Housing News. You can learn about your rights and those of your clients, as well as unfair lending practices, fair housing laws, recent studies on fair housing, statistics across the U.S., information on applying for grants, and much more.

Another great place to find Fair Housing information is the Fair Housing Blog, by Fair Housing Helper™, which is dedicated to training real estate professionals. Author Ron Leshnower explains:

“The truth is, understanding the difference between fair housing and unfair housing isn’t always clear-cut—even if you’re an intelligent professional with nothing but the best intentions. Fair Housing Blog by Fair Housing Helper™ aims to present a variety of interesting fair housing issues that are as relevant as ever. Avoid costly mistakes by reading the stories of real estate professionals who learned their compliance lessons the hard way.”

Finally, check out the National Association of REALTOR’s Fair Housing Resources page, where you can find discrimination field guides, fair housing toolkits, explanations on acts and initiatives, and more—like NAR’s Fair Housing Month poster showcasing the diversity of our country and the classes protected by the Fair Housing Laws.

As always, Pearl Insurance presents many options for Errors and Omissions coverage for real estate professionals, as well as a large selection of risk management tools—like those devoted to fair housing and avoiding charges of discrimination. For more information, visit www.pearlinsurance.com/eo.

Sometimes the past is one of the best learning tools around! Use the following Real-Life Errors & Omissions Claim Situation involving discrimination to avoid a similar legal showdown happening to you in your everyday real estate career. And be sure to have a good Real Estate E&O Insurance policy in place to protect you in case you find yourself in the middle of a court battle over fair housing regulations.

A Real Estate agent was hired by a landlord to lease a two-story townhouse that had one bedroom on the first floor and two bedrooms on the second floor, which was also where the only full bathroom was located. The first applicant to view the property informed the agent that his wife was physically disabled and would require accommodations so that she could access the second floor bathroom. He informed the agent that he was willing to make arrangements to have a chairlift installed and provided the required security deposit together with the fee for a credit check.

Problem
Despite the fact the background check revealed that the applicant had an excellent credit rating, the landlord refused to rent the apartment because he did not want the applicant to install the chairlift or otherwise make physical changes to the property. He instructed the agent to inform the applicants that he decided to lease to someone else, even though there were no other applicants.

Mistake
When the agent conveyed the intentions of the landlord, it was a clear violation of Title VII of the Civil Rights Act of 1968, as amended by the Fair Housing Act of 1988.

Result
The applicant sued the landlord and the agent alleging that they discriminated against him and his wife when they were denied the opportunity to lease the property because of her physical disability. Their allegations were bolstered by the fact that the rental unit remained vacant for nearly four months after being informed that it was leased to someone else. Moreover, the eventual tenant testified that she became interested in the property at a date later than the complainants. After incurring thousands of dollars in legal fees, the case settled on behalf of the agent without the agent admitting liability.

Prevention
Prohibited practices that lead to fair housing claims include the refusal to rent, lease or negotiate; offering different terms or affording different treatment; keeping records describing clients/customers; and failing to make reasonable accommodations. Providing equal service to all and not making assumptions of your client’s preferences will reduce the possibility of discrimination claims. And, as evidenced in this case, working with a discriminatory landlord can lead to claims alleging civil rights violations.

Do you have a similar story involving fair housing and discrimination to share with us? Send us your learning experience or just let us know what you think about this one! Just leave a reply below!

If you have any questions about Pearl’s Errors & Omissions Insurance for real estate professionals, give us a call at 800.447.4982—whether you’re looking for a new E&O policy or have questions about your current one. We’d love to hear from you!

You can also visit www.pearlinsurance.com/eo to find out more about our quality Errors & Omissions program, including policy features, risk management tools, and much more.

Tip 7 of 12 Risk Reduction Techniques for your daily real estate practice

Controlling your Errors & Omissions should be the mission of all real estate professionals. That’s why we’ve compiled a list of 12 risk reduction techniques you can use to minimize your legal liability and maximize your earning potential.

Tip 7: Familiarize yourself with fair housing laws.

Become familiar with and educate buyers and sellers about fair housing laws. Avoid using words and phrases in a discriminatory context in conversations and advertising. Never work with a discriminatory seller or buyer, and provide equal service to all.

Sometimes the past is one of the best learning tools around! Use the following Real-Life Errors & Omissions Claim Situation involving discrimination to avoid a similar legal showdown happening to you in your everyday real estate career. And always have a good Real Estate E&O Insurance policy in place to protect you in case you find yourself in the middle of a discrimination suit.

Listing Agent Withholds Purchase Offer from Seller

A piece of property was listed for sale. An agent from another firm presented Mrs. Jones, a prospective buyer, to the listing agent. After viewing the property, Mrs. Jones requested her agent draw up a contract and make an offer on the home. Later that day, the listing agent brought Mr. Smith, another prospective buyer, to view the property and also secured an offer.

Problem
When the listing agent presented the offer to the seller, he did not present Mrs. Jones’ offer. He only presented Mr. Smith’s offer, which was $20,000 less than Mrs. Jones’ offer.

Mistake
The seller claims that she would have seriously considered Mrs. Jones’ offer, but was advised by her agent to accept the other contract, which was the only contract the seller had seen at the time. The listing agent should have presented both offers to the seller, giving the second one as a back-up offer.

Result
Mrs. Jones sued the listing agent for discrimination stating her offer was not presented to the seller because she was a minority. Mrs. Jones was awarded $30,000 in damages. The listing agent also accrued $13,870 in attorney fees.

Prevention
Whether discrimination is intentional or not, civil action can be taken against you. To protect yourself against any charge or appearance of discrimination, be protected by a good Errors & Omissions insurance policy and be familiar with the constitutional and legislative information such as the Fair Housing Act Amendments of 1988, the Civil Rights Act, and the Equal Opportunity Housing code for REALTORS®.

Do you have a similar story involving discrimination to share with us? Send us your learning experience or just let us know what you think about this one! Just leave a reply below!

If you have any questions about Pearl’s Errors & Omissions Insurance for real estate professionals, give us a call at 800.447.4982—whether you’re looking for a new E&O policy or have questions about your current one. We’d love to hear from you!

You can also visit www.pearlinsurance.com/eo to find out more about our quality Errors & Omissions program, including policy features, risk management tools, and much more.