In Wyoming, there are specific guidelines and regulations that realtors need to follow to protect themselves from lawsuits and legal issues. Here are some tips to significantly reduce the risk of being dragged into a lawsuit:
1. Stay Licensed and Up-to-Date
- Continuing Education: Wyoming requires you to complete continuing education courses every three (3) years. When choosing these courses, take the course that is most interesting to you (you will pay more attention), and take courses that align with your area of focus within the real estate industry. Make sure you stay updated on the latest laws, ethics, and market trends to get the most out of your continuing education.
2. Know Wyoming-Specific Laws and Regulations
- Wyoming Real Estate Law: Familiarize yourself with Wyoming’s specific real estate laws, including the Wyoming Real Estate License Law and the Wyoming Real Estate Commission rules. These laws will guide you in handling transactions, client relations, and your overall business practices. Some statutes are provided below for your convenience.
3. Errors and Omissions Insurance (E&O Insurance)
- Like in most states, Wyoming realtors are highly advised to carry Errors and Omissions Insurance (E&O). While it’s not mandatory, it’s a smart protection against lawsuits related to professional errors, omissions, or negligence. I highly advise all realtors to ensure they are covered by E&O insurance and review your policy terms.
4. Error on the Side of Disclosure
- Property Condition Disclosure: Wyoming law does not require a seller to provide formal property condition disclosures. However, just because the law does not require Sellers to disclose, does not mean Realtors are off the hook.
- Material Defects: As part of your duty as a Realtor, you must disclose any material defects you are aware of regarding the property, even if the seller doesn’t. Failure to do so can lead to legal issues.
- Environmental Issues: If there are environmental concerns (e.g., flood zones, asbestos, radon, and lead based paint), you must disclose this to the buyer.
5. Avoid Misrepresentation
- No Exaggerated Claims: Be cautious when presenting properties. Do not misrepresent the property’s features, history, or condition to make a sale. Misleading information can lead to legal action and loss of reputation.
- Written Agreements: Always have written agreements for transactions. This includes purchase contracts, leases, and agreements to prevent disputes later on.
6. Dual Agency/Intermediary Laws
- Intermediary: In Wyoming, a realtor can act as an “Intermediary” who does not advocate for either party, but instead facilitates a transaction but keeping both parties informed and guides both parties to ensure the legality of a transfer of property. This requires informed consent from both parties. The realtor must explain the nature of an intermediary to the parties and get written consent.
- The term “Dual Agency” should be seldom used, as it creates the idea that the Realtor is an advocate for both parties, which is not permitted under Wyoming law.
- Disclosure: Be clear about the extent of your representation which is described in Wyo. Stat. 33-28-305, and should be reviewed before agreeing to be an intermediary. If you’re acting as an intermediary, ensure both parties know and agree in writing.
7. Fair Housing and Anti-Discrimination
- Wyoming follows federal Fair Housing laws (Fair Housing Act), so it’s crucial to avoid discrimination in any form. Be sure that all dealings with clients and customers are fair, equitable, and free from bias.
- State-Specific Anti-Discrimination: Wyoming also has state-specific anti-discrimination laws that prevent discrimination based on marital status, and other protected classes beyond federal law. A good rule of thumb, treat everyone equally.
8. Keep Clear and Detailed Records
- Transaction Documentation: Keep thorough records of every transaction you handle, including communications (emails, text messages, etc.), contracts, and disclosures. This can protect you in case of a dispute or legal challenge.
- Trust Accounts: If you handle client funds (e.g., earnest money deposits), make sure you are following Wyoming’s regulations for handling trust accounts. Improper handling of trust funds can lead to serious legal consequences and/or loss of licensing.
9. Provide Correct Contract Forms
- In Wyoming, real estate contracts and forms should follow state-specific guidelines. Ensure that the forms you use comply with Wyoming law, and don’t attempt to create or modify your own legal forms. The Wyoming Real Estate Commission provides approved forms for transactions, and it’s essential to use these. Some agents attempt to include so many “Additional Terms” that they change the meaning of the contract. If your transaction is complex enough to use such additional terms, have the terms reviewed by an attorney before submitting the offer.
10. Consult a Lawyer When Necessary
- Legal Advice: If a situation becomes complex or if you’re unsure about a legal issue (especially around contracts, property rights, or zoning laws), consult with a real estate attorney. As a realtor, you should not provide legal advice, not describe legal meaning/consequences of contract terms.
- Attorney Review: Encourage clients to have an attorney review contracts when necessary, especially for complex transactions or commercial properties.
11. Advertising and Marketing Compliance
- All advertising should reflect the true nature and condition of the property. When advertising properties, be truthful and comply with Wyoming’s advertising regulations which are described in Wyo. Stat. 33-28-119. Avoid misleading statements or omissions that could mislead potential buyers.
12. Understand Agency Relationships
- In Wyoming, there are several types of agency relationships, including Buyer/Seller agent, Intermediary, designated agency, and Customer. Always be clear about the nature of your agency relationship with your client and get written confirmation. The Real Estate Brokerage Disclosure form provided by Wyoming Association of Realtors provides a great description of each agency relationship. If you are unsure if you are unsure of what you are able to do for any agency relationship, reach out to a local real estate attorney.
- Ensure that all agency agreements comply with the state’s rules on real estate relationships and preferably use WAR Real Estate Brokerage Disclosure form.
By following these tips, you’ll reduce your risk of being sued in Wyoming and maintain a professional reputation. Always stay informed about changes to state and local regulations to stay compliant and protect yourself and your clients.
This is not legal advice, instead this information is provided for educational purposes. If you have questions concerning legal matters, whether general or specific to an issue, seek legal advice from a licensed real estate attorney.