The listing agent has reduced the price in the computer, but gets an offer afterwards at the old, higher price. Must she disclose the price reduction to the buyer or buyer agent?
No, nor should she. The listing agent has a fiduciary duty to represent the best interests of her client only, in this case the seller. Disclosing to a potential buyer that the client is willing to take less is an obvious ethical and legal violation of that duty.
A listing agent cannot find a copy of a disclosure she knows she had the buyer sign. The buyer is now threatening suit against the agent and the seller as a result of defects discovered in a house that closed 18 months ago. What is the potential exposure of the listing agent? The seller?
This situation raises several questions at the outset. First, neither agent has a copy of the ratified disclosure? The seller doesn’t have a copy of all his signed contract documents? The agent is required by Article 9 of the Code of Ethics to furnish all parties to the transaction signed and initialed copies of all agreements. If this was not done, the listing agent could be subject to an ethics violation. And what about the brokers? Both brokers are required by law to keep copies of all ratified contract documents on file for three years from the date of closing or from ratification, if the transaction fails to close. If a required addendum was missing from both files, I’m surprised it was not rectified before now. Not to mention that both brokers may now be in violation of the law.
If the disclosure is, in fact, missing and the buyer is threatening suit, then the agent not only faces the potential liabilities mentioned above, but the seller may face liability as well. The statute of limitations (the time period during which someone can bring a lawsuit) for lawsuits for damages resulting from the failure to deliver a disclosure is one year from the date of settlement. Since the settlement here occurred 18 months ago, the buyer likely cannot sue based on his alleged failure to receive the property disclosure. The agent should contact her E & O carrier.
My seller is a convicted sex offender and is listed on the sex offender registry website. After we sell his current home we will begin the search for a replacement home. Am I, as the buyer agent, required to inform anyone of the fact that my buyer is on the list? Can I decline to represent him as a buyer?
No law requires such disclosure. In fact, you should not disclose this to anyone without his consent, as to do so may jeopardize his ability to purchase a home, which is, after all, why he hired you. Suffice it to say that if you decide to take a job, you should do it professionally and competently, preserving your client’s confidences. If for any reason you cannot do this, you should decline the representation.
A prospective buyer of a residence received a Residential Property Disclosure Statement at the time the offer was being drafted. The offer was made and accepted that same day. Later that night, the buyer checked the sex offender website and found that a sex offender lives in the neighborhood. Buyer now wants out of the contract. Is there a three-day rescission right here?
No. The buyer would have a termination right if the disclosure had not been delivered until after contract ratification, but because it was given in a timely way, there is no termination right.
The local town manager has been convicted of child molestation and is selling his house before leaving for jail. Is the listing agent required to disclose to prospective purchasers the circumstances of the sale?
No. A listing agent is required to disclose material adverse facts about the physical condition of the property, not the fact that a crime was committed on the premises. The Residential Property Disclosure Act makes clear that neither the seller nor the seller’s agents are obligated to disclose that the property was the site of a felony, suicide, etc., or that a previous occupant had AIDS or was HIV positive. These “stigmatizing” events are not subject to mandatory disclosure.
A listing agent for a property in an estate runs an ad and shows the property to a buyer who responds to the ad. The listing agent decides she will act as a dual agent. An offer is prepared, submitted, and accepted. Listing agent now discovers that the buyer is a convicted sex offender, and that one or more of the family members of the beneficiaries of the estate will continue to live in the neighborhood where the property is located. May the listing agent/buyer agent/dual agent disclose this to the representatives of the estate?
When an agent enters into dual agency, she cannot do or say anything to benefit or detriment either party. The agent must also keep confidential any information gained through the brokerage relationship, on both sides. The only disclosure required in this situation is on the disclosure form. Of course, listing agents must disclose material adverse facts pertaining to the physical condition of the property of which they have actual knowledge to the buyer agent/buyer – that does not apply in this case.