Legal Liability Risks for Teams

Recently, there has a been a movement in the real estate industry to creating “teams”. A strong agent will have more work than they can handle personally and if they wish to expand, then they need to take on some colleagues. Hence: the formation of new “teams”.

But, remember, these people were in the real estate business personally. They were good at what they did and they were successful.

However, they were never managers, coaches or supervisors, so running a team, can certainly be strange and offer some new challenges.

The major risk in my experience is the lack of communication. Sure, they talk about nonsense, but when it comes to issues that really matter, there is absolutely no communication.

The Team Leader continues to work with Sellers. The new people to join the Team and take on the Buyers.

Buyer Mary, needs a house within 2 months or she will have to rent because her landlord wants the house back. Her upside limit is $1 million dollars. She is pregnant and will have to take time off work. She has two other young children 3 and 4 years of age. Her mother will be coming to live with her in 2 years. Her mother is not very mobile. Mary herself has some significant allergies which have plagued her most of her adult life. She finds cemeteries rather creepy. She has a car, but presently works from home.

Now, she calls Mildred, the Team leader. Mildred in days gone by, would have processed all this information and set about the search.

At this point, Mary says that Nancy will take over the search. Unfortunately, all this relevant information about Mary is not digested by Nancy. She doesn’t ask the right questions. She doesn’t seek assistance from Mildred, because “what she doesn’t know, she doesn’t know”. She relatively new to the business.

That leaves us with a major liability risk for the Team: the lack of communication.

In my experience, this is fundamentally, the root cause of liability for Team members. They failed to communicate with each other, seeking assistance at the right times.

So, the problem isn’t discovered. It never came up. It wasn’t dealt with or solved, the deal just got closed, or Mary lost her deposit and is exposed to other damages in a lawsuit.

If Mildred was still alone practicing real estate, this never, ever would have happened.

Mildred was a great agent, but a poor Team leader.

Brian Madigan LL.B., Broker

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