Can Brokers and Agents Be Held Liable for Damage Caused by a Recommended Roofer?

Real estate brokers and agents often provide clients with referrals for contractors, including roofers, to assist with property repairs or improvements. But what happens when a recommended roofer causes significant damage to the property? Can the broker be held legally responsible for the contractor's actions?

While brokers or agents typically aren't liable for independent contractors' work, certain circumstances—such as negligence, misrepresentation, or violations of consumer protection laws—could expose them to legal claims.

1. When Can a Broker or an Agent Be Held Liable?

A broker's liability largely depends on whether they breached a legal duty, misrepresented the contractor's qualifications, or were actively involved in the hiring process. Here are key scenarios where liability may arise:

• Negligent Referral – If a broker/agent knowingly recommends a contractor with a history of complaints, unlicensed work, or legal disputes, they could be held responsible for failing to exercise due diligence.
• Misrepresentation – If a broker/agent falsely assures a client that a roofer is licensed, insured, or highly qualified when that is not the case, they could be liable for misrepresentation.
• Violation of the Texas DTPA – If a broker's referral is considered deceptive or misleading under the Texas Deceptive Trade Practices-Consumer Protection Act, the client may have grounds for a lawsuit.

2. Understanding Broker/Agents Duties Under Texas Law

The Texas Real Estate License Act (TRELA) imposes duties on brokers, including honesty, fair dealing, and disclosure of material facts. However, brokers are generally not responsible for the independent actions of third-party service providers unless they:

• Received financial compensation for the referral, creating a business relationship beyond a mere suggestion.
• Had direct involvement in hiring, supervising, or controlling the work of the contractor.
• Made assurances about the quality, safety, or outcome of the work.

3. Protecting Brokers and Agents from Liability

Brokers/Agents can take steps to reduce their risk when providing contractor referrals, including:

✔️ Providing Multiple Options – Instead of recommending a single roofer, offering a list of licensed and insured professionals can prevent claims of favoritism or undue influence.
✔️ Using Disclaimer Language – A written disclaimer stating that the referral is merely a suggestion and that the client assumes responsibility for hiring decisions can limit liability.
✔️ Verifying Contractor Credentials – Checking a roofer's license, insurance, and complaint history before making a referral demonstrates due diligence.
✔️ Avoiding Financial Arrangements – Accepting referral fees or kickbacks from contractors can create a conflict of interest and increase liability risks.

4. Legal Remedies for Property Owners

If a roofer causes property damage, the primary legal claims would typically be against the contractor. Property owners may consider:

• Filing a claim against the roofer's insurance policy for damages.
• Pursuing breach of contract claims if the contractor failed to complete the work as agreed.
• Filing a DTPA claim if the referral involved deceptive practices.
• Seeking mediation or arbitration to resolve disputes without litigation.

While brokers are generally not responsible for the actions of third-party contractors, liability can arise if they engage in negligent referrals, misrepresentation, or deceptive practices. By exercising caution and following best practices, brokers can protect both their clients and themselves from legal disputes.

Have questions about broker/agent liability and contractor referrals? Explore our resources or reach out to learn more about how The Keller Firm supports real estate professionals in navigating legal risks.

Disclaimer: This website is for informational purposes only and does not constitute legal advice. Do not act or refrain from acting based on the content of this site. Use of this site or communication with The Keller Firm through this site does not establish an attorney-client relationship.