Question: We often give advice to our clients as to their options and we make recommendations to our clients that are consistent with what we learn in risk management seminars. All too often, the clients do not want to follow our advice or recommendations. Recently, we really felt that the Buyers should get their own general contractor inspection to evaluate the remodeling work that the Seller had performed. The Buyers did not want to spend the money. What is the best way to protect ourselves when clients decide not to follow our advice and/or recommendations?
Answer: Document. Document. Document.
Doctors and lawyers often give advice and make recommendations that their patients/clients do not follow. These professionals put notes (a document) in the patient/client file which contains (a) the advice/recommendations that have been given; (b) the decision made by the patient/client; and (c) the reason why the patient/client is disregarding the advice/recommendations.
In many instances, the file documentation is followed-up with a written communication (such as an email) to the patient client which reiterates (a) the advice/recommendations that have been given; (b) the decision made by the patient/client; and (c) the reason why the patient/client is disregarding the advice/recommendations along with (d) a warning that the patient/client is proceeding against the advice and recommendation of the professional. Then if any harm occurs because the patient/client made a bad decision, the professional can more readily argue that the patient/client assumed the risk of their own decision.
The best advice for Brokers and Agents is to proceed in the same manner that doctors and lawyers use to protect themselves: Send an email to the client which includes (a) the advice/ recommendations that have been given to the client; (b) the decision made by the client; and (c) the reason why the client states that they are disregarding the advice/recommendations along with (d) a warning that the client is proceeding against the advice and recommendation of the professional.
PRACTICE TIPS
Agents whose Seller will not follow good brokerage advice should be sent an email which documents that the Seller is proceeding against the Broker’s advice and recommendations. The format for that email is:
I have advised you to [insert specific advice/recommendation, such as “obtain advice regarding your right to cancel the contract from a qualified California real estate attorney”]. You have chosen not to follow this advice because [insert Seller’s reason as specifically as possible, such as “you do not like lawyers and do not want to spend the money.”]. Since you intend to proceed without following my advice, please understand that you will be assuming the risk of any liability, costs or damages that may result because of your decision to not follow my advice.
Agents whose Buyer will not follow good brokerage advice should be sent an email which documents that the Seller is proceeding against the Broker’s advice and recommendations. The format for that email is:
I have advised you to [insert specific advice/recommendation, such as “secure the further inspections noted in the house inspection report”]. You have chosen not to follow this advice because [insert Buyer’s reason as specifically as possible, such as “your aunt who is a Broker said it was a waste of time”]. Since you intend to proceed with this transaction without following my advice, please understand that you will be assuming the risk of any liability, costs or damages that may result because of your decision to not follow my advice.
A copy of this and all other transaction emails should be put into the Broker file.
This Weekly Practice Tip an attorney client privileged document and is for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
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