Vendor Recommendations

Legal Case Summaries

Broker Liable for Damage Caused by Recommended Vendor

• Prior to making recommendations of vendors, implement vetting practices requiring confirmation in writing of licensure/accreditation status and liability insurance coverage.

• Avoid hiring third party vendors directly for work being performed at a consumer’s property. Instead, act as an intermediary by introducing the third party vendor to the property owner.

• Always recommend multiple trusted professionals to clients for their own selection.

• Evaluate your client agreements to include a clear and explicit delegation of duties in investigating and evaluating third party contractors.

• Be sure to comply with your state’s laws regarding duties owed to clients and consumers, including the duty of reasonable care, broadly defined as conduct meeting standards of professionalism and ethical conduct within a profession, including but not limited to good faith, competence, trustworthiness, diligence, and lawful behavior.