Realtor – Page 2 – Bergmann Law LLC

A New Jersey Federal District Court recently refused to dismiss a plaintiff’s claim under the Fair Debt Collection Practices Act (FDCPA) brought against a realtor who took steps on behalf of the landlord-client to try and collect overdue rent from the plaintiff. As a Realtor you should be aware of this ruling and its potential consequences to keep yourself free from exposure.

A landlord took harsh action against the plaintiff, his tenant, who was 10 day delinquent in her rental payment. The plaintiff/tenant, who was an officer in the US Army, had received a mobilization order which included an annual salary of $84,000. Presumably in an effort to assist her client, the real estate agent, on behalf of the landlord, contacted the tenant’s military superiors and advised them her rent payment was late. Based on information supplied to them by the realtor, plaintiff’s superiors revoked her mobilization along with the accompanying $84,000 salary.

When plaintiff sued both the landlord and the real estate broker under the FDCPA, the broker moved to dismiss, arguing that she was not a “debt collector” as defined under the FDCPA. The FDCPA defines a debt collector as:

“Any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due, or asserted to be owed or due to another.”

While the broker’s liability has yet to be decided, the court ruled that plaintiff had the right to conduct discovery to determine whether the broker was a “debt collector” under the FDCPA.

While it appears the broker may have been attempting to better service the landlord-client, the better practice is to have the landlord collect its own debt or – better yet – refer the landlord to an attorney. Any broker who feels compelled to try to collect rent on behalf of a landlord-client should first become fully conversant with the somewhat labored and intertwined provisions of the FDCPA, and then adhere to its requirements because those who fail to do so could find themselves in expensive litigation in their Federal District Court, which is something no realtor wants.

If you have questions about the FDCPA or any other landlord/tenant issues, contact the law offices of Bergmann & Good. We’re here to help.

Every real estate transaction is different and the simple answer is: it depends. For example, in South Jersey, real estate transactions are conducted much differently than in North Jersey. So the first question is, where is the property located? If the Seller is a Giants or Jets fan, you should probably have an attorney. Eagles fans, or in other words, properties located below New Jersey Route 195 are divided on the need for representation. So for you Eagles fans out there, let’s take a look at the options:

For the Buyers:
-Is the property a distress, bank owned or short sale?
-Is the property part of an estate sale?
-Is it a commercial property?
-Is there something about the property that leaves you uneasy such as potential structural issues?
-Is it a shore property with new FEMA maps under consideration or an area you simply are not familiar with?
-Are you an out-of-town buyer?

For the Sellers:
-Are you selling a property in distress?
-Are you selling a property left to you in an estate?
-Is your co-owner no longer on speaking terms with you?
-Do you know something about the property that you are unsure how to disclose?

It should become much clearer to you now when you should hire an attorney to close your real estate deal because if you answered yes to any of the above questions, then hiring an attorney to guide you through the process would be prudent. If none of those situations apply to you, then you are probably fine to use your Realtor’s knowledge and expertise to take you through to closing. As part of a Realtor’s New Jersey licensing education they are taught the real estate contracts used within the state, and New Jersey also provides you with a three-day “attorney review period” should you change your mind, and decide to hire counsel. New Jersey also requires continuing education courses for licensed Realtors and/or certifications on subjects such as ethics, buyer’s agency, distressed property sales, etc. These measures are in place to protect all parties, buyers, sellers as well as agents. Finally, if your Realtor is acting as a disclosed dual agent, and happens to be the agent that brought the Buyer to your sale (or vice versa), it is also a good idea to consider representation. The minimal fee an attorney charges for what is typically the largest transaction in a consumer’s life, is well worth the protection of hiring an advocate whose only duty of loyalty it to you.

But what if you are selling a distressed property and you decide you need counsel. Your neighbor’s nephew is an attorney and looking for business, so maybe you should just hire her – at a minimal fee – or better yet – she may do it for free!

Of course you can hire whomever you like, but remember if you think you need an attorney for your transaction, it is probably best to hire someone with experience in that particular area of law. I have seen relatively uneventful transactions turn into not only blown up deals, but litigation where “Aunt Nancy” the criminal attorney doing a favor for her nephew makes unreasonable changes to the contract pushing the seller to cancel the deal. Or worse, when “my friend the divorce attorney” puts together the sale of his long-time friend’s commercial property – and doesn’t properly address environmental issues resulting in years of litigation. A penny saved is not always a penny earned.

Hiring a real estate attorney when needed is a smart choice. Their mission is to negotiate to make this transaction come together in a peaceful manner that is fair and amenable to both sides. A real estate attorney takes over after the selling price and terms have been established by the Realtors in the contract and all parties have signed off. He will review the contract itself, negotiate repairs based on the home inspection report, and collaborate with the title company. He will also be with you at settlement along with your Realtor and usually your mortgage broker. Think of these people, all working for you and in your best interest.
Finally, hiring a real estate attorney can typically cost from $800 – $1,000 depending on the transaction. For the die hard bargain shoppers, we are probably not a good match and I most sincerely wish you all the best. Maybe things will go smoothly and maybe they won’t, but the purchase or sale of real estate is a significant transaction that I do not recommend you enter into without experienced guidance.

Tag: Realtor

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