Note keeping, email confirming, file documenting.
We call it the paper trail to safety.
A lot gets said between a real estate agent and a client, from the moment they meet to the final transaction – and it should all be documented.
Whether it’s confirming elements of a contract or conversation regarding a home inspection, all it takes to protect yourself against a potential lawsuit is writing a short note to yourself in your phone or sending a quick email or text to the client outlining the conversation (and asking for them to acknowledge receipt).
Similarly, key points of contact, notes and communications regarding contact with lawyers, listing or selling agents, city/municipalities or any specialists you encounter during the transaction should also be documented.
Who, What, When
Discussions surrounding instructions or specific advice should clearly state what was said, by whom and when.
“Developing the self-discipline to regularly – and continually – file notes results in a more complete and organized file and could be critical evidence in your defence in a lawsuit,” says REIX Sr. Vice President of Claims and Litigation Dave de la Ronde.
“The chance of success in defending a claim for real estate malpractice rises dramatically with the level of note taking in the file. It frequently extinguishes claims by removing the element of creditability in the ‘my-word-versus-your-word’ argument raised by many claimants.”
De la Ronde says that even when the agent may have been negligent, a well documented file makes damage control and defense easier and more effective.
“Insurance programs have settled many cases where the practitioner acted appropriately but was unable to prove it; evidence is key. In many of the claims REIX deals with, the insured has not been diligent in keeping good records. We encourage everyone to review their note taking practices and discuss file practices with your broker.”
There are simple and effective methods that can be used that may end up saving you time trying to re-construct a transaction that took place years ago.
After all, isn’t time one of your most valuable assets?
Please contact REIX if you have any questions or would like to discuss this further.
The Real Estate Insurance Exchange (REIX) provides mandatory errors and omissions insurance to over 14,800 Alberta and Saskatchewan real estate industry members and nearly 1,200 brokerages. We’re dedicated to providing high value to our subscribers through exceptional claims, risk and financial management. Be sure to follow us on Facebook!