3 Real Estate Legal Issues Facing Brokers

Sean St. Clair presents three common Real Estate legal issues in transactions that can be overcome with proper training.

  • 1. Fiduciary Duty
  • 2. Springing Power of Attorney
  • 3. Heirs and Probate

Video 1: Dealing with Real Estate Agency Law and Fiduciary Duty

When we deal with agency, we are looking at the Commissioner’s Standards and the first thing that we have to look at is A.A.C. R4-28-1101, and this deals with two things.  

  1. This deals with the fiduciary duty that you owe to your client.  If you are the listing agency, your client would be anyone that owns the property or has an interest in the property. 
  2. If you are representing a buyer, then your client would be the person or entity that is going to purchase the property.  

While you owe a fiduciary duty to your client, you also owe a duty to treat all parties to the transaction fairly.

Video 2: Agency Law: Use of Power of Attorney

Another real estate legal issue deals with the use of a power of attorney.

Is that a valid power of attorney being used to purchase the property in the name of the principal?  

You have an agent that is showing up and saying, “I have this power of attorney.  It allows me to act on behalf of this person, and I can buy this property in their name.” 

We need to know if this is a valid power of attorney.  

There are two types of powers of attorney.  

  1. Immediate Power:  Immediate Power of Attorney is when the power given to the agent is vested at the time that the power of attorney document is signed.
  2. Springing Power: Springing power occurs when the principal is deemed to be incompetent, 

The Dangers of Springing Power With a Real Estate Transaction

With the springing power you may have a situation where the agent thinks that they have the right because Mom or Dad is incompetent or has a disability or something. 

But in order for that power to spring forward you normally need some form of doctor’s note or analysis or opinion in which to invoke that power.  

Is a title company likely going to close if you have a springing power but no doctor’s note?  No. 

Now you have a buyer that may be unable to perform in the transaction.  

Spring Power of Attorney with a Trust in a Real Estate Transaction

Same with a trust.  You may have multiple trustees, successor trustees and those powers arise under certain circumstances. 

So we need to know if this trustee is purchasing the property in the name of this trust. 

Are they able to purchase it or is there something more that we need to allow them to do so.

Video 3: Real Estate Law: The Advantages of Probate

Probate is another common real estate legal issue. Following are a few of the advantages of probate.

Heirs do not have to go on title.  

When I read the Estate of Brooks case, it was almost like a lightbulb went on when I thought about it.  

I realized even though there are processes potentially that are faster and cheaper than a probate:

  • A beneficiary Deed
  • An Affidavit of Succession to Real Property

These two items may not always be the best mechanism for the parties involved.  You can learn more about Affidavits of Succession and Beneficiary Deeds on this blog and video.


If all you are wanting to do is liquidate the real estate and sell it, and you have no intention of putting it in your name and using it, utilizing it, or renting it you may want other options. 

Whatever the case is, a beneficiary deed or an affidavit of succession is not the way to go from an heir’s standpoint.  

This is because you are putting them on title to the property and now they are the party that is selling the property with all of the liabilities associated with not only selling it, but owning the property.  

Solution 1: Informal Probate Reduces Personal Liability

It could be worth paying more and waiting a couple of weeks longer, to do an informal probate. This way the personal representative can sell the property in their capacity as personal representative.  

The only liability is that of the estate and no one else.  

Solution 2: Probate Eliminates Creditor Claims

The other advantage of probate is it can eliminate creditor claims through notice.  

You have the opportunity to provide notice of probate. Perhaps there are creditors that exist, but what happens if you provide them notice and they don’t respond?  They don’t make a claim. 

In that case, you can eliminate that debt and you don’t have to satisfy it.