Your best defense against a lawsuit is to know the law. Many of the mistakes made by real estate agents are made because the agent was not aware that she was doing something incorrectly, or (more often) not doing something she was supposed to do. The more informed you are, the less likely you are to make a mistake. Not knowing the law is not considered an excuse. You are the professional and you are expected to know.

You are also expected to know things that are considered “public knowledge.” Let's say that a new community is planned for the open space behind the house you are selling. Although the sellers have enjoyed peace and quiet and the view of green rolling hills for a long time, this will be changing soon. It has been in all the papers and the developers have even held a public meeting to answer questions that the neighbors have. You need to disclose this fact to any prospective purchaser. Chances are this information is in the seller's disclosure, but what if the seller moved away from the community years ago and a tenant lives in the property? What if it is vacant? No matter whether or not the seller discloses this fact, it is still “public knowledge,” and you are expected to know it and to disclose it.

A thorough understanding of the state real estate laws that affect agents is a major step toward minimizing your risk of valid complaints. All agents learn these laws in prelicensing school, but it's easy to forget the intricacies of the laws once they have moved beyond the test-cramming tactics that most people employ to pass the state exam. There are several things you can do to stay current with laws:

• Pay attention during your required continuing-education updates.

• Take additional continuing-education classes each year — more than the required hours.

• Don't miss educational classes presented by your local MLS, because they usually deal with risk management and ethics, two top complaint-related issues.

• Take time to read updated booklets or flyers from your state licensing commission.

• Monitor your real estate commission's Web site if it includes updates to laws that affect you.

You cannot prevent unhappy clients from lodging a complaint against you, but you can do your best to make sure you have complied with all state real estate laws, making it less likely that a complaint will result in the loss of your license.

Even if you make an honest error, you may be able to avoid a lawsuit by the manner in which you handled the transaction from the start. Keeping good records, being honest in all dealings, disclosing all material facts, including all ways that you receive compensation in the transaction, will go a long way toward minimizing your risks.

Be up-front and noncombative with all parties, look for solutions, and handle everything calmly and without finger-pointing. Conducting yourself this way will decrease the chance of someone getting upset with you — even if things go wrong. Apologies and graciousness can help to keep you out of court.