Real estate brokers assist their clients through real estate transactions and activities dealing with the real property inside of a specific or multiple states. Even though they are bound by a code of ethics and must comply with the standards of conduct for professionals, sometimes they commit fraudulent activities that could lead to severe penalties.
Real estate deals and interactions are the line of work that a broker engages in when at work. He or she handles clients, communicates with lawyers and real estate agents as well as surveyors and private agencies. It is his or her job to ensure that the transactions and sales complete appropriately. However, there are certain instances where the broker may commit fraud either intentionally or without his or her knowledge. Some may lose their jobs due to these criminal activities while others need training to realize what constitutes fraud and what is merely bending the rules.
Misrepresentation in the Sale
The primary concern regarding fraud with a broker is the misrepresentation about certain key factors of a sale. Some may provide false details about themselves such as credentials, background and work history. These and other fraudulent activities are most common in real estate dealings. Brokerage fraud occurs when the whole firm or agency engages in similar fraudulent actions as a single broker. Unfortunately, without knowing this is a crime, the company or single professional may commit the actions repeatedly until someone contacts the authorities or another professional explains the matter. Some may experience a lawyer hired by the firm providing training classes in recognizing fraud.
Broker Fraud Examples
Scams are a significant part of broker fraud. The broker may engage in illegal activity through the scam and continue to charge a person for various issues. He or she may also provide a foreclosure listing or not follow the requirements in the full disclosure of various details. He or she may misrepresent a property through the age, background, dimensions and defects. He or she may even use a false license or provide the buyer or seller with fake credentials to further his or her activity or scam. In some circumstances, he or she may delegate the work he or she is responsible for to another person without gaining the consent of the buyer.
Full disclosure is important along with the necessary duty of care to the client. It is the task of the broker to provide all information, remain honest and give the data about situations to the buyer or seller. In real estate matters, the client places trust in a broker, and the duty to carry out the proper function is important. If the broker breaches the duty to perform his or her duties, he or she could face a legal claim against him or her for the violation. Then, he or she may face a negative impact on his or her career or land in jail or prison for some time.
Harm to the Victim and Consequences
The primary concern in broker fraud is the injury to the client. If he or she suffers through a scam that the broker initiated, he or she may need to hire a lawyer and litigate against the professional. The worse the crime, the more compensation that the client will require. If the property has multiple loans or additional fees attached to it, the new homeowner will need to either reverse some of these processes or force the broker to pay back the monies through a court order. Gathering evidence is generally less difficult if the broker is unable to cover his or her tracks.
Other consequences could lead to various types of compensation provided to the client to include punitive damages if the judge determines that the broker must face added punishment. Recovering losses is a right of the victim. Monetary fines for the activity may occur against the broker. Criminal charges are possible depending on what the broker engaged in with the client or a financial institution. The reputation and professional life of a broker may end if he or she is caught participating in broker fraud for real estate situations. Then, he or she may need to find another line of work.
Contacting a Lawyer for Broker Fraud
When facing the consequences of real estate broker fraud, the victim will need to hire a lawyer to gather evidence and pursue a legal civil case against the professional. Compensation in these matters is crucial to remaining financially solvent after entering into the deal.