If you're careful when choosing a broker and spelling out your agreement in a con- tract, you'll reduce the chances of disputes later- but there's no guarantee that all will be smooth sailing. The secret, of course, is spotting problems early. This Section lists some common signs of trouble and possible solutions.
If you encounter any of the following difficulties, you know that you need to take action:
Are your questions being answered? If important issues are addressed poorly -or not at all--watch out. In his eagerness to close the deal, your broker may be afraid that candor will get in the way. For example, if the broker blows off questions about environmental hazards on or near the property, or if you can't get a straight response to your query regarding the anticipated jump in the landlord's property taxes (you'll probably end up paying for some of it), get pushy.
Are there available rentals that the broker is not showing you? A broker who steers you toward certain properties (such as those listed with his office or that promise a higher com~ mission) and away from others may have hidden motives for doing so. It's appropriate to be suspicious. Your broker is supposed to be showing you space that’s most suitable for your needs, no matter where it is.
Are you being rushed? Anxious to dose the deal and earn the commission, a broker may minimize or gloss over problems with a space or a deal or fail to disclose key information. For instance, you may not be told that the anchor tenant in the shopping center you're considering is about to move out. if you’re the last to learn about important details like this, be advised: You aren't getting the full, undivided attention of your broker.
Is the broker disclosing key information about you? Your broker may not share important information about you- such as your need to move immediately or your key negotiating points -with the landlord or the landlord's broker. True, this information may speed up the bargaining, but it may also make it harder for you to strike the best possible deal, If you learn that your secrets are being shared, it may he due to the broker’s eagerness to close a deal- any deal- irrespective of what's best for you.
If you've kept the lines of communication open with your broker, a face-to-face airing of your grievances may suffice to get things hack on the right track. Sometimes, however, depending on the nature of the problem, you need to consider more drastic action, such as:
Complaining to the broker's boss, if there is one. To preserve goodwill, the boss may either take steps to correct the problem or agree to terminate the brokerage contract.
Filing a grievance with the local real estate board-or even with the state licensing authorities. A broker may quickly make peace with you rather than face an embarrassing disciplinary hearing.
Agreeing with the broker to arbitrate or mediate your dispute. The local real estate board may have a procedure in place to handle disagreements.
Contact the state agency that regulates real estate brokers for information on real estate laws and regulations and complaint procedures. Many state agencies have websites. Find yours by looking at your state's home page for the real estate department or commission. To get started, see U.S. State Resources on Findlaw at http://www.findlaw.com.
If communications have totally stalled or broken down, or your best efforts to improve your brokers performance yield no results, it may he time to end the relationship, as explained below.
There are two common legal grounds for firing a broker. If you can prove them, you’re unlikely to be second-guessed by a judge or mediator should your ex-broker file a legal action against you. They are:
Breach of contract. Your written contract should state what your brokers duties are. For example, your contract may say that the broker will show you at least four appropriate spaces within 45 days. If the broker is a slacker and shows you only one space, that’s a breach of contract and you probably have the legal right to end the contract.
Breach of fiduciary duty. Even if your contract doesn't specifically say so, you have 4 right to your broker's undivided loyalty. For example, your broker can't disclose to the landlord or other brokers that you're under extreme pressure to move into new space within 60 days and are prepared to pay top dollar to meet that deadline. Leaking this information without your permission can, of course, undermine your bargaining position-and it's a serious breach of your brokers fiduciary duty. This usually would give you the legal right to fire the broker.
Seek legal advice before you fire your broker. Firing a broker when you don't have a valid legal reason to do so can have serious consequences. For example, if you dismissed your broker improperly but go onto sign a lease on your own or with another broker, you may be liable for the first broker’s commission or you may owe other fees under your contract. Since analyzing your ability to fire your broker without repercussions can be daunting, your best bet is to seek advice from an experienced real estate lawyer. A precipitous or unwise decision could come back to haunt you in the form of legal hassles and commission expenses.