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Real Estate E&O – Claims Examples

Property Managers Claims Examples:
  • Wrongful Eviction

A property owner rented one of his homes to a young man in a residential neighborhood. The young man came with excellent references.  However, he immediately began to disturb the peace in this neighborhood, often throwing loud parties that ran late into the night. After numerous warnings the property owner took steps to evict the tenant, resulting in removing their property from the premises. The young man sued for wrongful eviction.

  • Loss of Income

A property owner has undertaken a project to repair 5 elevators. The cost of the project is $500,000. The repair company is to be paid $100,000 as each elevator is completed. The property manager advances money to the repair company prior to completion of the project. The repair company leaves the work site prior to repairing several elevators. The owner has to hire a new company to complete the project and pay additional money to repair the additional elevators. The property owner commences a suit against the property manager seeking to recover amounts improperly paid to the first repair company.

Commercial Property Managers Claims Examples:
  • Loss of Income

A property manager oversees a strip mall. Over a period of years, this property manager does not upkeep the property as contracted. As a result, the owner is forced to lower the rent being charged monthly. He sues the property manager for loss of income.

  • Misrepresentation

A corporation contracts with a property management firm to lease a floor in one of their buildings. Six months after relocating to this property, construction begins on the road leading to this property. This causes heavy traffic, which makes it difficult for vendors to reach the building. This leads to a decrease in productivity. The Corporation sues for misrepresentation, as they were not told of the road construction that had been scheduled before they entered into their lease.

Real Estate Developers Claims Examples:
  • Negligence

A family member of an employee who died while working for a general contractor on a construction site sues the project owner/developer. The allegations are: the owner/developer severely limited site access, failed to coordinate the activities of multiple contractors on the site, and issued defective contract documents which failed to properly sequence construction activities.

  • Negligence

An adjacent property owner sues the project owner/developer for property damage and consequential damages due to negligent construction operations, including alleged ‘design errors and omissions’ of the owner’s design professional.

Real Estate Agents Claims Examples:
  • Negligence

A couple consulted a real estate broker to purchase a residence in which they could also run a daycare business. The broker made inquiries and showed them a townhouse, which they eventually purchased. After closing, the couple was told by the townhouse association that they were forbidden use of the property for a daycare business. The couple filed suit for negligence.

  • Misrepresentation

A couple asked their real estate agent which school district the residence was located in. The real estate agent mistakenly told the couple the wrong school district. The couple purchased the property and discovered that their children were to attend a different/inferior school district. They sued this real estate agent for misrepresentation.

Tenant Discrimination Claims Examples:
  • Leasing Disputes

A condominium management company and a tenant remain entangled in an ongoing dispute regarding the leasing of the tenant’s condominium. The plaintiff filed a claim against the rental company and its parent management corporation because she alleges they blocked her from working with a desired real estate company, even blocking an agent from entering the building. According to the management company, previous arrangements with tenants obligated the use of management’s real estate office. Estimated costs associated with the claim are over $20,000. Case is pending.

  • Discrimination

The claimant has filed a complaint with the Office of Housing and Urban Development (HUD) against an apartment complex owner because she alleges it refused to allowed her to view or rent a unit because she is African-American. According to the owner of the apartment complex, the claimant’s complaint stems from a misunderstanding. When questioned about the availability of a three-bedroom complex, the owner told the claimant one unit would be opening up within the next week (because of the eviction of a tenant). Unfortunately, the insured did not realize there was a waiting list for the property. The claimant is seeking a settlement of $38,000 in addition to $10,000 and $5,000 donations to specified charities. Case is pending.