How to File a Complaint Against a Real Estate Agent

How to File a Complaint Against a Real Estate Agent  ‍

Buying a first property or selling your starter home should be a process you look forward to and real estate agents are there to support you. Unfortunately, in rare cases, real estate agents falsely represented the property in some way, or fail to disclose a defect. If this happens you may have legal options available to you. Misrepresentation, dishonesty, or some other type of failure on the part of a real estate agent can be grounds for filing a small claims lawsuit. Other legal options include filing a complaint with the appropriate state licensing agency. Below we break down the process of filing a small claims case and more. 

In this article learn about:

• The difference between a real estate agent and a realtor 

• Reasons to sue a real estate agent 

• Can you file a complaint with the state licensing board 

• Can you file a complaint with the National Association of Realtors  

• What are the steps to suing a realtor in small claims court 

• What is the small claims hearing like 

• Preparing to file your small claims lawsuit against a realtor 

What is the difference between a Realtor and a Real Estate Agent 

The term real estate agent and realtor may seem interchangeable but in fact, they mean different things and have different legal ramifications. A real estate agent is a licensed real estate professional. Real estate agents help prospective buyers and sellers market and purchase a property. Real estate agents can also help arrange property inspections, write sale of land contracts, and negotiate property prices. 

A realtor is a term trademarked by the National Association of Realtors, so only real estate agents registered with the National Association of Realtors can call themselves realtors. Realtors have to participate in regular training and continuing education. Realtors are also subject to a code of ethics from the National Association of Realtors. Ultimately, realtors and real estate agents help buyers and sellers with their property concerns and both will be discussed in this article, with an emphasis on real estate agents. 

Reasons to sue a Real Estate Agent 

You can sue a real estate agent if you had a problem with their services. Some of the most common reasons to sue a real estate agent are: 

• Dishonesty (intentional or negligent misrepresentation)

• Failure to disclose a property defect

• Failing to keep confidential data safe or misusing data 

• Incomplete land contracts

• Failure to review or recommend land surveys

• Contract drafting errors 

• Failure to review title 

• Loss of earnest money

Filing a Complaint against the real estate agent with the appropriate state licensing agency

Your state likely has a licensing agency or Real Estate Commission which allows you to file a complaint against a real estate agent. Once a complaint is filed an investigation will occur based on the claims written on the complaint.   

Filing a complaint against a realtor with the National Association of Realtors

As members of the National Association of Realtors, realtors have to follow a Code of Ethics. If a realtor has violated one or more articles of the Code of Ethics, you can file an ethics complaint through the local association of Realtors where the realtor holds membership.  

Suing a real estate agent in small claims court 

What are the steps to suing a real estate agent in small claims court 

We have outlined each one of these steps in detail, click the links to learn more.

1. Consider filing a complaint against a real estate agent before suing in small claims. 

2. Prepare and file the lawsuit.

3. Notify ("serve") the real estate agent you have sued. 

4. Prepare for and attend the small claims hearing. 

Once the lawsuit is filed, the small claims hearing will be scheduled 30-70 days later. 

What is a small claims court hearing like?

Small claims hearings are typically informal and most hearings do not last long. While many disputes against real estate agents settle before a small claims hearing, here is what to expect if your lawsuit does not settle.

Who will represent the real estate agent at the hearing?

• The easiest way to answer this question is that a lawyer will not be representing the real estate agent  since lawyers cannot represent parties at the initial small claims hearing.

If you and the real estate agent you sued, both show up:

• Right before the hearing, the judge will ask you and the real estate agent  to show each other the evidence that you will later show the judge.

• The judge will ask you why you are suing.

• The judge will ask the real estate agent to tell them their side of the story.

• The hearing will last around 15 minutes.

• The judge will ask you to show them the evidence you brought. Sometimes the judge will keep the evidence. Other times, you will get the evidence right back.

• Very rarely a judge will tell you whether you won or lost at the hearing. Instead, the judge will tell you that their decision will be mailed to you (which usually takes a few weeks to two months or so).

If you show up but the real estate agent you sued does not show up:

• If the real estate agent you sued does not show up to the hearing but you properly notified ("served") them, then the hearing will still take place. You don't automatically win and you will still have to tell the judge why you should win.

Preparing to File Your Small Claims Lawsuit Against a Real Estate Agent  

In order to sue a real estate agent in a small claims court, you need to know:

1. If the real estate agent is doing business as an individual or as a corporation or LLC.

2. If the real estate agent is doing business as a corporation or LLC, then it is important to find who the "registered agent for service of process" is.

When filing a lawsuit against a real estate agent in a small claims court, it is very important to write down their information correctly and make sure you are suing the correct business entity.

1. What does suing the "correct business entity" mean?

An example is the best way to explain this. Let's say you had "ABC real estate agent " do work on your teeth.  

ABC real estate agent may be a tradename for ABC real estate agent, Inc. or even a more remote name like The ABCDEFG real estate agent  Company.

Real estate agents sometimes use a name other than their real legal entity name when doing business. This is called a fictitious business name.

What happens if I don't sue the correct business entity for the real estate agent?

For one, you may be suing the wrong real estate agent. If you win the lawsuit you will get a "judgment" against the incorrect real estate agent and this will bring problems down the road. 

The goal here is finding the correct person or business to sue.

2. Who is the "registered agent for service of process"?

• Any corporation or LLC that does business in your state, has to select a person (or another business) to receive legal documents (like a lawsuit) on their behalf in the given state.

• This person (or business) responsible for receiving legal documents on behalf of the real estate agent  is called the "registered agent for service of process" or just the "registered agent."

• After the lawsuit is filed, this is the person (or business) who will be notified ("served") of the lawsuit on behalf of the real estate agent you are suing.

• If the real estate agent is doing business as an individual (or sole proprietor) there is no agent for service of process (the real estate agent is the person that has to be served with the lawsuit).

3. Checklist of Potential Evidence 

• Any agreements signed 

• The sale of land contract 

• Communications with the real estate agent or their office

• Pictures of property defects 

• Pictures of the property in question 

• Declarations from witnesses