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01-18-2013 08:48 PM
What legal obligations does the listing agent have
While inspection reports can't be shared with othe
01-19-2013 01:53 AM
It will be interesting to see what the agents here have to say, but my understanding is that the onus is on the *sellers* to disclose all known defects. I don't think the agent has any obligation or liability at all unless they encourage a seller to hide something.
01-19-2013 09:53 AM
There needs to be a rule that requires significant findings from previous inspection reports to be apended to Form 17. I suppose technically there is if the report was shared with the homeowner, since they now have "knowledge" of the problem, but I doubt they ammend the form very often.
We backed out of one house after an inspection revealed $25,000 of foundation work was needed. In addition to that, several other major items came up that would have cost a boatload to fix. Most of these issues had been "painted over". The current owner resisted our attempts to pass this info on to them. When the house finally sold, I felt like sending the new owners our correspondance with the previous owner showing that they had knowledge of some pretty major issues, but decided not to. If I had, I assume they could have sued the previous owner if Form 17 had not been updated with the findings from our inspection. Then again, maybe not. I'm not sure what kind of weight an inspection report would have in court. It comes down to everyone needing to do their own thourough inspection, no one is going to protect you from a shady deal.
01-19-2013 04:26 PM
HLM, I believe that all you would need to do is send the information to the sellers via certified mail. You indeed would have had them in a bind if they misled the buyers. Because my tendency is to disclose, and because I bought a house with a clean form 17 and many problems that I learned were known to the seller, I hope that more people will start sharing information and supporting buyers in the way you have suggested. All houses of any age have a water issue of some kind in this region. Buyers have a right to know what they are.
But the reality certianly is that buyers need excellent inspectors and have to assume that probems are hidden under drywal.
01-19-2013 04:52 PM
So is there a way to pass on inspection information to future Byers that is legal and will not start up a fight with a seller? Or is there a way to check whether or not major repair issues are being disclosed upon re-listing?
I guess the ultimate goal is to provide future buyers with all the information, but not in a vengeful/confrontational way from a seller stand point.
01-20-2013 02:53 PM - edited 01-20-2013 02:54 PM
My understanding is that, passing on information to to the potential buyer could well land you in a tricky spot. Suppose the sale fails to close due to "information" passed on by a party not directly involved with the deal. The seller may be able to come after you for interfering in a business transaction.
Of course the "information" passed on might even be correct but if the deal falls through and the seller faces a loss you could be sued.
Also I wonder could the seller make a case that they completely disagreed with the so called non-disclosed information.
I owned a property where two inspectors told buyers there was severe water damage in the ceiling of one room. I of course knew that the damage was simply poorly patched dry wall after ceiling mounted cabinets were removed. Image one of them told a newly interested party that the house "had bad water damage" and the new party with drew because of that...
I strongly suggest anyone thinking of passing on a report, or otherwise sticking their nose in a deal they are not involved in, take the time to talk to an attorney first. In fact many will even have a very short free chat on the phone.
A futher thought.
I believe most inspectors are aware that getting recs from agents is bread and butter, so not too many are looking to see deals fall through if you know what I mean.
Any attorneys out there or those with better knowledge feel free to correct me.
01-21-2013 08:37 PM
You bring up a good point about the Form 17 (Seller Disclosure Form) and its accuracy. As a broker, if I notice a home has recently been under contract and was "pending inspection" but went active again, I would ask the listing agent for an updated Form 17. Interestingly, the Form 17 is not required as part of the negotiating process, but is required to be presented and signed prior to closing (simply acknowledging receipt). The form provides the buyer an opportunity to accept the information passed along by the seller, or walk away because of the information listed (within a certain time frame).
Inspectors/inspection are a great peace of mind. They will look in every area they have access to, and report on those findings. Inspections are a first step to learning more. Inspectors look for safety issues, violations of today's building standards, and other cosmetic conditions. An inspection report will refer buyers to specialty contractors for more in depth analysis on items that are of concern (electrical, plumbing foundation, roof, etc.).
And to answer your question about a broker passing along information, a brokers obligation is to that of their client. However, the Form 17 must be completed accurately. If I know my client is purposely hiding information, significant, safety, structural or otherwise, I will refuse to work with that client, and most other brokers feel the same way.
01-21-2013 09:47 PM
Joe, do you agree with Oddman that someone could get in trouble for passing inspection information on to a buyer or to the buyer's agent? Have you ever had that happen?
01-22-2013 07:46 AM
There is a difference between passing an inspection report to anyone other than the inspector's clients and disclosing significant material defects. It does not matter if an inspector informed the seller or someone just touring the property points out a valid defect: the seller now knows. The financial and moral dillemas that a seller may have to wrestle with regarding disclosure after discovery should be easily resolved by considering what they could lose if solid evidence is presented after a lawsuit is filed. The agents involved will typically be named a co-defendants and they could cross-complain. Concealing and/or not disclosing material defects could be defined as fraud, misrepresentation, and collusion. If someone becomes ill or sustains an injury due to lack of disclosure....anyhow the point is: do the right thing and disclose...golden rule etc...
01-22-2013 02:23 PM
I think passing along inspection reports might be straddling the line between tort law and good neighborly conduct.
I was involved in a deal where a third party was dealt with by an attorney I was working with.
The dude was attempting to pass along information that may have impacted my deal.
Now according the attorney people not directly involved in the transaction must be able to fully prove anything they say and may not be deliberately attempting to drive away business, gain from it or be acting out of malice. So I don't know what would happen, but I would hope your inspector had given you a bullet proof report.
(In my view the guy was just a nosey git who felt it was his job to stick his oar in because it was "his" street and he thought he was street captain or something.)
Now that is just what I recall, I am not an attorney I don't even pretend to be one on the internet. Hell I am not even drinking buddies with an attorney.