Tuesday, February 10, 2009

Estate agents - the ERA case 2

You wish to sue an estate agency for the misconduct of the agency's agents. Can you do so?

In the ERA Realty Network case, trial judge found that the company was liable for its agents' misconduct (Mike and Jeremy were given appointment titles with the word "director), even though the company tried to claim that they were independent contractors.

The judge said that on the relevant documents, the company's logo was present. Also, when the clients refused to pay the agency commission, it was the company that started a lawsuit in the Small Claims Tribunal. All this made them liable for their agents' actions under the law of agency.

Another point not mentioned by the judge but I think is crucially important - individual estate agents do not have to be licensed but must work under a licensed agency. If you are a real estate company and you allow rogue agents to work under your agency name and to use your license, it is very unlikely that you can turn around and disclaim all responsibility for any wrongs that they do.

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