Realtor held liable for incorrect information in the MLS

Residential Realtors must verify

What happens when a Realtor believes a property is only zoned as residential as it is in the middle of a subdivision, but it turns out the past owner applied for a mixed permit and the zoning is marked improperly in the MLS? What about when it is wrong on the tax record and says a house is a three bedroom, but it is actually a four bedroom and the data isn’t corrected by the Realtor when they enter that listing into the MLS? It depends on where you are, but in Boston, attorney and law blogger, Richard D. Vetstein says Realtors must independently verify property information. We believe this advice is universal.

Recently in Boston, the Massachusetts Appeals Court ruled in DeWolfe v. Hingham Centre Ltd. and considered it a Realtor’s duty to disclose and independently verify zoning information about a listing property. Vetstein writes, “The agent, relying on what turned out to be erroneous information supplied by his client, listed a Norwell property on Multiple Listing Service (MLS) and newspaper advertising as “zoned Business B.” The property was not in fact zoned for business use; it was zoned residential, thereby prohibiting the hair salon the buyer wanted to open at the property.”

Vetstein notes that the disclaimer on the MLS listing and in the purchase and sale agreement was insufficient and the Court held that the agent could be held liable for misrepresentation.

Laws vary in every city, but this serves as an excellent warning to independently verify every line in the MLS and not assume that the client or your past knowledge is completely accurate.

Vetstein offers the following advice:

• Never trust your client. I hate to say this, but when it comes to disclosures, it’s true.
• Always independently verify information about the property from available public sources. Here, the agent could have simply gone down to the town planning office to verify whether the property was zoned commercial or residential. (The buyer or his attorney could have done so as well—this was a complete failure on all sides).
• When it comes to zoning, which can be complex and variable, think twice before making blanket statements. Better to be 100% sure before going on record about whether certain uses are permissible. You can always get a zoning opinion from a local attorney.