When hiring a real estate agent to buy or sell property, it is important to understand their professional responsibilities.

What are their obligations? What are the guidelines of their conduct? Which assurances should they provide to their customers?

This article will explore the primary duties and ethical requirements of real estate agents, offering insights into their role and what to expect during property transactions.

Maintaining Objectivity and Fairness

The contract between the seller and the buyer with the realtor is of intermediation. The Italian civil code does not give a definition of mediation, but of the mediator defined as someone who connects parties for a deal without being bound to them. A mediator is therefore one who puts two or more parties in relation for the conclusion of a deal, without being bound to them by relationships of collaboration, dependence or representation.

Independence and Impartiality of Real Estate Agents

Real estate agents must work objectively and fairly, avoiding conflicts of interest or preferential relationships with any party involved in the real estate transaction. The agent must be neutral, ensuring fair treatment for all parties involved.

The interests of the seller and the buyer must be safeguarded, avoiding prejudices that could disadvantage either party.

In practice, the intermediary must not have any working, collaborative or representative relationship with the client he or she is assisting. This impartiality helps ensure that everyone gets a fair shake in the deal.

Real Estate Agents Are Obliged to Provide Complete and Accurate Information

Real estate agents must provide complete and accurate information to all parties involved in the deal. They must communicate all relevant circumstances that could affect the conclusion of the deal or would have led the contracting parties to either not complete the deal or to do so under different terms and conditions. This includes any defects that might reduce the value of the property.

The agent is obliged to provide any information of the property’s characteristics, for example any defects, legal restrictions, or encumbrances that may affect the property.

If known, agents must inform the buyer if the property was a donation (which could pose a risk of restitution claims from the donor’s heirs), of any building code violations, or if the property lacks a certificate required by the law, i.e of habitation. The agent must also inform the buyer about existing mortgages, ongoing foreclosure procedures, bankruptcies of the seller, or any other insolvency situations of the seller. They must verify any co-ownership of the property. For example, if the property is owned by a married man under the regime community property Agents have to diligently verify this information and avoid providing false or misleading information.

Professional Ethics and Responsibility

Real estate agents must be compliant to ethical standards in their work. They should behave correctly, with fairness, avoiding fraudulent or unfair practices. Agents must not try to evade their obligations to customers, such as the payment of commissions or expense reimbursements. They must act with honesty and transparency, ensuring that all parties involved in the transaction receive fair treatment.

Responsibility of Real Estate Agents

Real estate agents can be held liable if they breach their professional duties. If an agent fails to provide complete and accurate information or acts fraudulently, they may face legal action and be required to compensate the parties involved, as well as return any fees received. However, the agent's liability may vary depending on the specific circumstances and applicable law.

Real World Scenarios

To better understand the obligations and responsibilities of real estate professionals, let us look at a concrete example. Lets pretend a real estate agent knows that the construction of the building does not comply to laws and regulations and they choose not to tell the interested buyer. As a consequence, the bank could refuse to lend on that property until it is made compliant. Most owners will refuse to, and therefore you could be stuck with that liability (and subsequent fines) if you don’t have it assessed (assuming you pay cash). The real estate agent could be held responsible for all the deriving consequences faced by the buyer, such as monetary damages.

On the other hand, the real estate agent avoids conflict of interest if they stay impartial during the transaction and thoroughly investigates and discloses all pertinent information regarding the property’s legal status. The agent facilitates a transparent and equitable transaction that meets the needs of both the seller and the buyer by abiding by ethical guidelines and completing their duty to offer all pertinent information.

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