Can you sue the real estate agent?

Question

So I'm selling my property In NYC and getting lots of attention.  A agent from Marcus and Millichap (MM), a national brokerage firm,  reaches out to me and says he has an interested buyer.  I say okay and explain certain parties are banned because they are notorious for being people that flip contracts and wasting a lot of time.   The agent from MM,  brings his father into the mix because he is one of the premier real estate attorneys  in the world of NYC rent stabilization.  I start explaining the building's history and then  again repeat the names of the parties that I won't transact with. Both agent and father assure me they don't represent those parties. Contract signed.

A month later it becomes apparent that the people that I said I didn't want to do business with were the parties that signed the contract, hidden by an authorized representative.  I was pissed and called up, Marcus and Millichap and asked if it were ever okay for a broker/agent to lie to consummate a deal.  They said, "it's never okay to lie!",  but had a cover story about the banned parties getting involved after contract signing.  I can prove this to be false.

Low and behold the buyers weren't able to flip the contract and have refused to close.  I can start litigation to keep the downpayment and sue for failure to perform with the buyers, but wonder if the Brokerage house  and agent/ broker have any liability.

I welcome anyone's thoughts.

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Roger R. · Answer

@Russell Brazil. I represented myself as the seller's agent.  The buyer's agent was specifically given the names of two people that were off limits and he agreed.   It has been documented on several  levels about my demands  before and after contract signing. The brokerage house that the agent belongs to insisted  that off limits parties got involved AFTER contract signing and that alleviates them of any fault.  I can prove that the suspect people were involved before contract signing.

Henry Lazerow · Answer

This is why you need a buyers broker. We have the proper paperwork to avoid this happening.

Steve Morris · Answer

"As to suing the agents..... you “represented yourself” the agents represented some buyer."

Well, I guess my basis would be that the agent made (being extreme here) a fraudulent and knowing mis-representation of the buyer.  That might get some traction with the REA.

However, if you got a lawyer, you'd probably need to show some damages more than just taking the property off-market for a period.

Steve Morris · Answer

"wonder if the Brokerage house  and agent/ broker have any liability."

Well, am in the business and there is a reason brokers don't have the greatest rep in the world, so I understand.

Having said that, outside of outright fraud or demonstrable incompetence, probably you're limited to complaining to the REA in your state.  However, they usually can't do much unless it's pretty clear-cut legal (not moral) contravention or misuse of funds.

I would recommend on something specific like that, that you ask if you can get an eMail and save it) or something written to the effect they understand what you want and are trying to avoid.

Most liars/cheats hate leaving a paper trail.

Joe Splitrock · Answer

Speak with an attorney to determine your options. You can sue whomever you want. The question is do you have a case, what is the cost to pursue and will you prevail with any significant remedy? There is many times I could have sued and may have won, but it made better financial sense to walk away.

Wayne Brooks · Answer

@Roger R. You may have told them a lot of things.....but all that matters is the language of the contract you signed. Apparently you were okay with signing a contract Not with the actual buyer, but with some rep who you knew would not be buying themselves. The contract language is the only thing that matters, your demands outside of that mean nothing. As to their EM, were there any contingencies letting them out?

Also, the whole corona virus/force majeure theory hasn’t been established one way or the other, as to canceling/enforcing contracts.

As to suing the agents..... you “represented yourself” the agents represented some buyer.

Darius Ogloza · Answer

Not quite.  The question will be whether the integration clause in the contract - assuming there is one - negates any misrepresentations made in the parties' course of dealing.  If not, any statement made in the course of discussions lacking a reasonable basis is potentially actionable.

Darius Ogloza · Answer

Your situation sounds quite colorable to me.  One benefit of a negligent misrep theory is that it should trigger the E&O policy (unlike fraud).  In any event, only a NY licensed lawyer can advise you, but I encourage you to kick the tires on this claim.

Roger R. · Answer

@Darius Ogloza The contract didn't close. Because of Covid, the buyer a known flipper is asking me to retrade in excess of 500k along with the other losses I have incurred with them not closing, 60k and growing. That would be the losses incurred.

Darius Ogloza · Answer

The theory of liability would be negligent misrepresentation.  You had to have incurred damages flowing from the misstatement in order to survive a challenge to your complaint.  Run this theory by a NY attorney.