Recently, a CRES client, a real estate broker, received such a subpoena. One of his former agents had been the listing agent for the family home of the divorcing couple. Although there didn’t appear to have been any assertions made against the broker or the former agent, the broker had been subpoenaed.
In this case, the ex-wife’s counsel wanted evidence and testimony about the sale and purchase price of the family home and would go to lengths to get it. In the end, the parties decided the broker’s file and testimony were not needed, and he was released from the trial subpoena. If he hadn’t been released, it could have been costly.
The Benefit of Subpoena Coverage
Subpoena coverage may not be at the top of the list of things you look for in a real estate errors & omissions policy. In fact, you may not have really thought about getting subpoenaed. Our client may not have worried much about it either—until it happened to him. Notice that the broker and the agent hadn’t done anything wrong or had complaints lodged against them. They were being used to support somebody else’s argument. That’s little comfort when you’re faced with a subpoena.
Learn more in our Ultimate Guide to Understanding Real Estate E&O Insurance.
If you are subpoenaed, you face the cost of hiring an attorney to help prepare a response or to represent you. You should advise your broker and advise your real estate errors and omissions insurer. Is subpoena coverage included in your E&O? It’s worth checking.
Depending on your state, your CRES real estate E&O may include Subpoena coverage under our “Broad Form” endorsement, or it may be an affordable option. For individual E&O coverage, Broad Form is included in most base CRES E&O plans when your state requires real estate E&O coverage (and may be an affordable option in other states). For company real estate errors and omissions plans, Broad Form may be an affordable option in your state. With this coverage, your fees to respond to a subpoena will be reimbursed, including your attorney fees and the production of documents if applicable.
If you’re a CRES client and get subpoenaed, contact us within 14 days of receiving the subpoena to activate your coverage. Subpoena coverage could reimburse you for up to $30,000 in costs of responding to the subpoena.
Have a question about subpoenas or another legal issue? CRES members can call the CRES ClaimPrevent® Hotline pre-claim. We want to help with any issues that put you at risk. Clients receive a guaranteed response within 4 hours or next business day, with recommendations confirmed in writing.
See also the CRES webinar on everything you need to know about subpoenas.
