about

Understanding Disclosures

Type Matter:  Understanding Disclosures
Issue:  Can listing Agents be held liable for a Buyers’ lack of understanding of disclosures?   Is there a difference if a Broker represents the Buyer?
Answer:  Depends

Facts:  Buyer brought suit against the listing real estate Broker for the alleged failure to properly disclose the death of the seller/previous inhabitant of the home. The listing Agent had disclosed the death in both the TDS and the AVID. However, according to the lawsuit, the Buyer did not speak, read, or understand English. The Buyer alleged that the listing Broker had a duty to ensure such a material disclosure was discussed and understood.

Results:  A demurrer on behalf of the listing real estate Broker was sustained by the court. The court found that the listing Broker properly disclosed the material information. The court ruled that once a Buyer executes a document, pursuant to case law, that Buyer is assumed to have read and understood the document.

Lesson:  The listing Broker is not a fiduciary and his/her duty is met if material facts are disclosed. That said, there was a cost to defend this case, so if there is reason to believe there could be a problem with a Buyer understanding a disclosure, the listing Agent should put in writing such concern to the selling Broker. This can be contrasted with the risks a selling Broker may have as the fiduciary to assure the Buyer understands the disclosures. While there is no duty to translate, there is a duty to make sure the Buyer understands the nature and ramifications of the disclosure. Despite properly disclosing material information, and despite being able to rely on case law to the effect that one who signs a document is legally bound by its contents, a selling Broker may still have exposure as the fiduciary if that Broker has reason to believe the Buyer does not understand the disclosure.

 

 


The following does not create an attorney-client relationship between the viewer and CRELA, Shannon B. Jones Law Group or Spile, Leff & Goor and the viewer may not use anything contained in or omitted from as the basis for any claim of any nature against CRELA, Shannon B. Jones Law Group or Spile, Leff & Goor.

Both comments and pings are currently closed.

Comments are closed.