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Real Estate Brokers: Avoid These Legal Issues That Can Lead to License Suspension


Becoming a real estate broker in Florida is an exciting prospect. There are many gorgeous homes throughout the state, and selling just a couple homes could make you rich.

However, being a real estate broker is not without its struggles. In this job, you work on commission only, so you don’t receive a regular paycheck. You must make a sale in order to make money, and this sometimes causes brokers to promise too much or fail to disclose important information that can affect a sale.

These sorts of issues may not seem too significant, but they can actually affect your career. A growing real estate market—combined with a sue-happy nation—can cause you to become target for lawsuits from buyers, sellers and even employees.

The good news is that real estate brokers are not found liable in 75 percent of these cases. Still, it’s important to know what actions you need to avoid so you can avoid having to give up the license you’ve worked so hard to earn.


Misrepresentation and failure to disclose account for most lawsuits brought brokers. These elements involve misstating a feature on a property or failing to mention an important aspect of the property that could affect the sale. Title and environmental issues are often not disclosed in a sale, while structural issues are often misrepresented.

Avoid this issue by using seller disclosure forms. Document the sellers’ sources of information and never make predictions.

False Advertising

When advertising a house your firm has for sale, it’s important to advertise it accurately. Brokers cannot simply advertise a property however they see fit. They must abide by state laws as well as the REALTOR® Code of Ethics, which requires brokers to use advertising that paints an accurate picture of the property for sale. Therefore, be sure to tell the truth.

Employment Status of Salespeople

Approximately 90 percent of brokers use independent contractors as their salespeople and staff. While this is acceptable, it’s important that workers know their employment status and that you treat them accordingly. For example, if you classify someone as an independent contractor, but force them to adhere to a strict schedule as if they are an employee, then they could be entitled to benefits such as unemployment and workers’ compensation. Be sure you under state laws regarding employment and use written agreements for sales associates.

Acting as a Lawyer 

Brokers and sales associates are not allowed to practice law. While sometimes law and real estate overlap, brokers and sales associates cannot give legal advice. This includes drafting documents. Brokers should use pre-printed agreements assessed by a lawyer. To avoid ethical issues in this regard, check the laws in your state and encourage clients to seek advice from a lawyer.

Keep Your License with Help From a Tampa Real Estate Broker License Lawyer 

In the real estate field, it’s easy to endanger your license unintentionally. By educating yourself and keeping your business organized, you can avoid potential lawsuits from engaging in questionable acts.

If you receive a complaint relating to your real estate license and fear that your sales associate’s or broker’s license is in danger, get legal representation from the Law Offices of David P. Rankin, P.A. I am a Tampa administrative lawyer who focuses on real estate licensing. Contact my office today for a consultation by calling (813) 968-6633.