REIX: Real Estate Insurance Exchange - Alberta, Saskatchewan

We’re a non-profit organization which means that premiums are used to pay the costs of defending claims and surplus funds are used to keep premiums low.

Want to Avoid Getting Sued? Do these things.

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When it comes to the fast-moving world of real estate, it turns out patience really is a virtue.

That’s because, even as you’re juggling multiple clients and staying on top of endless details, knowing how not to get sued goes a long way to keeping you out of court.

It starts with taking time to prepare transaction documents in a clear, understandable way and keeping good notes throughout the transaction, according to REIX Senior Vice President Dave de la Ronde.

“Lawsuits go on for years and can be quite stressful. Exercising care at the time of the transaction can, and does, dramatically reduce the amount of time a matter is in litigation if not put an end to it quite quickly,” he says.

Here are some of the top reasons subscribers get sued – and how to avoid the pitfalls.

Attention to Detail

  • When listing or re-listing a property, always check to see if the information on a prior listing is correct. Many times, there are errors that are simply being repeated.
  • Be sure to always disclose previous issues or problems with the property.
  • Always read the titles you pull and ensure you verify what the instruments on title are.

Ask the Right Questions

  • If you’re the buyer’s agent, make sure you ask what the most important elements or features are that the buyer is looking for – and what they’re NOT looking for.
  • If you’re the seller’s agent, for the purposes of disclosure, always ask the seller for details of any previous problems with the property and what, if anything, was done to fix them.

Know Your Clauses

Subscribers can easily get caught out if they fail to pay attention to some key clauses in the contract. Here are the two most common reasons subscribers get sued as a result of ignoring important clauses:

  • Failing to list ALL of the chattels, or personal property, in the Purchase Contract. This means that everything, from furniture to lawnmowers, that’s included in the sale must be listed. Be sure to determine exactly what is chattel and what is a fixture.
  • Writing terms, conditions and/or addendums that are confusing and or unclear. Anything written in a contract should be done in such a way that any person that’s not a party to the contract can read it and understand exactly what the parties are agreeing to. 

The Real Estate Insurance Exchange (REIX) provides mandatory errors and omissions insurance to approximately 13,500 Alberta and Saskatchewan real estate industry members and protects them from financial loss due to negligent acts while performing their real estate duties.

Experts in the Field – How REIX Helps with Lawsuits

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If you’ve ever wondered what happens after you contact REIX in the face of a lawsuit, you may be surprised to learn just how many people are available to help.

Over the years, REIX has developed relationships with a host of experts it can call upon on your behalf. So, who exactly are these people and how do they help?

Here are answers to some of your most pressing questions: 

 Once you’ve been sued, what does REIX do?

Once REIX reviews your file and analyzes the claim, it then picks the best defence counsel, or lawyer, to work on your case based on the nature of the allegations and lawyer’s experience in defending that type of claim. Regardless of who is chosen, REIX remains involved throughout the entire process.

How do you choose the law firm?

REIX works with 10 law firms across Alberta and Saskatchewan, each of which has its very own REIX team of lawyers.

What about other parties who could be at fault?

Once REIX analyzes your claim, it decides if other people should be involved as well. For example, REIX may believe a property inspector or seller are at fault for the claim and should be brought into the lawsuit that was filed against you.

What kinds of experts can help with my case?

REIX works with a vast array of experts to help defend claims against subscribers. These people are leaders in their field and are familiar with REIX and the real estate industry, such as appraisers, standard of care experts and engineers.

Who are REIX’s in-house experts?

Behind the scenes, REIX relies on people with expertise beyond lawyers (though we have those too!), including financial and business experts such as actuaries, investment managers and insurance consultants.

How can REIX help before a lawsuit is filed?

Of course, no one wants to get sued. That’s why REIX spends much of its time and energy helping ensure subscribers are never in that situation in the first place. Sometimes, REIX will call on a lawyer to help resolve the matter before any lawsuit is filed, but in most cases our in-house expertise and proactive interventions are all that are required.

The Real Estate Insurance Exchange (REIX) provides mandatory errors and omissions insurance to approximately 13,500 Alberta and Saskatchewan real estate industry members and protects them from financial loss due to negligent acts while performing their real estate duties.

Welcome to the REIX Blog

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Welcome to the first in a series of regular blog posts that will keep you in the know!

The blog posts are part of REIX’s commitment to connect with you – our subscribers – more frequently, highlighting our services and expertise and meeting our goal of helping real estate industry professionals across Alberta and Saskatchewan.

Blogs will be short, informative and posted on the website, to Facebook and sent directly to your inbox bimonthly. They’ll also cover a range of topics, including:

  • Common claims and how to avoid them
  • Why supporting rookie subscribers is good for everyone
  • Best practice industry tips

We know you’re busy, so we promise to keep the communications to a minimum. However, we love hearing your thoughts, feedback and suggestions so please feel free to get in touch with us anytime.

30th Anniversary

This year, REIX is celebrating its 30th anniversary, so we’ll also be updating you on the different ways we’re marking the occasion (including a special celebration this fall), along with REIX profiles, stories and throwbacks. Do you remember what you were doing in 1991?

Website

If you visit the REIX website, you may notice a few changes there, too. The site has been updated and streamlined, making it easier to access with only the Claims area requiring a password (the password remains insurance).

Facebook

Plus, we have a new Facebook page, so be sure to Like and Follow us to stay up to date on our posts, which will include links to the blog, videos, upcoming events and other industry news.

Call for Nominations

If you’re keen to gain board experience, want to learn more about the insurance industry or engage with a group of fellow REIX subscribers, we want to hear from you!

The REIX Nominating Committee is looking for new board and claims committee members with knowledge, skills or interests in the areas of governance, leadership, strategic planning, fiscal oversight, risk management and/or loss prevention. New appointments start in October. For more information, visit the REIX website or email Lisa Sabo.

The Real Estate Insurance Exchange (REIX) provides mandatory errors and omissions insurance to approximately 13,500 Alberta and Saskatchewan real estate industry members and protects them from financial loss due to negligent acts while performing their real estate duties.

Multi-Factor Authentication on your business email account

If you already need a separate passcode (e.g. a code texted to your cell phone) to access your email  for the first time on a new device, or to view it on the web, then you already have this.

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Weekly backups for your business computer systems

Your computer systems, such as your PC and your phone, contain mission-critical data on them – regular backups are a simple and effective way to ensure disruptions to you and your clients are minimized in the event disaster strikes.

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Firewalls on your internet access

Almost all internet connections have a firewall built in to prevent people from freely accessing your home or business network, or worse, your computer’s files.  You most likely already have this in place, but we encourage you to familiarize yourself with the key piece of security equipment.

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Endpoint Protection (a.k.a. anti-virus)

An up-to-date endpoint protection software is key to keeping your PC safe from viruses – it’s simple to install and may already have it included free with your computer (e.g. Windows Defender). It scans files, emails, and more to make sure nasty viruses and code to infect your PC.

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Security and Privacy Liability

Provides coverage, including legal expenses and damages, for any claim made against you for any actual or alleged breach of privacy, damage to the computers or systems others, unauthorized disclosure of data, and more, arising out of your professional services.

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Data Recovery and Loss of Business Income

a) Pays for the expenses related to investigate, repair, and manage a cyber event, including but not limited to: damage and interruption by a computer virus or malicious code, accidental damage or destruction of data, and malfunctions.

b) Reimburses you for lost income as a result of a cyber event – subject to an 8 hour waiting period.

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Event Management Expenses

Covers the costs associated with a breach of your systems to ensure you meet the requisite privacy legislation requirements – including notification costs as well as credit monitoring and other support for affected clients.

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Data Extortion

Provides services and coverage for expenses related to cyber extorsion threats (e.g. ransomware) – including the costs to manage the event and, where necessary, pay the ransom.

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Social Engineering Fraud

This is coverage for your clients – it covers them for lost deductibles as a result of somebody using your identity and business relationship as part of a real estate deal to convince them to send their deposit to the wrong place.

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Security and Privacy Liability

Covers legal expenses and damages for any claim made against you for breach of privacy, damage to the computers or systems of others, unauthorized disclosure of data, and more, arising out of your professional services.

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Data Recovery and Loss of Business Income

Pays for expenses related to investigating, repairing, and managing a cyber event, and reimburses you for the income lost due to the event.

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Incident (Event) Management Expenses

Covers costs associated with ensuring you meet the requisite privacy legislation requirements post-incident — including notification costs, credit monitoring, and other support for affected clients.

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Data Extortion

Provides services and coverage for expenses related to cyber extortion threats (e.g. ransomware) — including costs to manage the event and if necessary, pay the ransom.

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Social Engineering Fraud

Covers the actions of third parties who fraudulently cause the diversion of deposit funds from a real estate trade.

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Multi-Factor Authentication (MFA):

Multi-step account login process that requires users to enter more information than just a password, like a code sent to their email or phone.

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Weekly Backup:

Copies your files to a safe secondary location for preservation in case of equipment failure or cyber incident.

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