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A Legal-Economic Analysis of Changing Liability Rules Affecting Real Estate Brokers and Appraisers

Authors: Donald R. Levi and Curtis D. Terflinger

Start Page: 133
End Page: 149
Volume: 3
Issue Number: 2
Year: 1988
Publication: Journal of Real Estate Research

Abstract: Real estate professionals operate in a legal environment characterized by new expectations. The increasing number of lawsuits reflects the arrival of the age of consumerism in the real estate industry. Liability positions being staked out are largely premised on industry professionalization. The area of greatest activity is misrepresentation litigation initiated by buyers. Buyer cases have become the crucible for developing "public policy" concepts of professional liability. This article considers the multiple premises of liability to buyers, including negligent misrepresentation, state licensing laws, and professional codes of ethics. Also consideration are applications to appraisers, liability economics, and preventive strategies.

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