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Litigious liaisons

17 May 2017

Australia is one of the most litigious societies in the world and real estate agents are not immune to claims.

By Nancy Rainbird

Our society is becoming more and more litigious. You only need to look at some of the crazy claims being levelled at agents to understand that even the most diligent among us could fall victim.
At Realcover, we’ve noticed a significant increase in claims being made against agents over the past year. This has resulted in more damages being paid out and agents need to be more vigilant than ever before.

Some of the cases have included claims you could never have envisaged, highlighting the importance of having the right level of professional indemnity insurance.

Crazy case studies
Realcover has received some claims involving circumstances that, quite simply, boggle the mind!
Take the instance where an agent was sued by a tenant after the tenant injected heroin and then passed out in the bedroom. The tenant’s hand landed on a heater and, because she was unconscious, stayed there for about six hours. The result? Catastrophic burns to the tenant’s hand resulting in amputation.

But the tenant claimed their injury was caused by the negligence of the agent. Why? Because, according to the tenant, the agent had failed to install a smoke alarm in the bedroom and had not carried out an adequate risk assessment of the premises. They also claimed that the premises were leased in circumstances that were unsafe, because it did not comply with legal requirements.

The case is currently with the Supreme Court and awaiting a hearing date, but it goes to highlight how a claim can arise from a situation which you could never envisage.

Realcover has also had a claim where a plaintiff sued an agent after they suffered an injury when they fell over a plant which protruded onto part of the footpath. The plaintiff claimed that allowing the plant to spill onto the footpath caused a safety hazard and the plaintiff sought damages from several defendants, including the managing agent.

It serves as a reminder that sometimes agents don’t need to be found negligent to be hit with hefty legal and defence costs.

Other typical professional indemnity claims
The type of claims Realcover has been involved in are certainly not limited to those set out above.

Other claims include:

  • Incorrect description of properties for sale
  • Defamation by an agent
  • Discrimination by an agent regarding a potential tenant 
  • Cultivation of cannabis by a tenant causing property damage and loss of rent payments
  • Excessive mould causing personal injury to the tenants

...and the list goes on!

Realcover knows how the risks for agents are increasing, with new legislation aiming to expand their role into other areas. 

However agents are not architects, engineers or landscape gardeners etc, and so our best advice is to get adequate professional indemnity insurance for peace of mind.

While care has been taken in preparing this article, and the information in it has been obtained from sources that Realcover believe to be reliable, Realcover does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose that the article may be used. Realcover accepts no liability for any loss or damage (whether caused by negligence or not) resulting from the use of this article.