Whose Job Is It?
Time and time again while teaching classes the issue of disclosures comes up and the argument about who is responsible for making them. In Virginia, a Seller is not obligated to disclose anything about the property, however a Listing Agent is required to make disclosures to all involved about anything that they have knowledge of, regarding the property. I hear that many states are similar. Regardless, I am more concerend about the Buyer agent’s responsibility, than that of the Listing Agents in this post. Since the mid-nineties when Buyer Agency was first introduced, Buyer Agents have been given increased amounts of liability. Caveat Emptor is becoming more and more of a fallacy – and I’m not sure it’s a bad thing.
Disclosures
Last week Jim Duncan wrote an article, here on AgentGenius, entitled Buyer Agents Warn of Mold! Seller’s Rights?
The point of that particular post was to discuss Buyer Agents disclosing mold via an online format. There are always those agents who hide behind the “I’m no expert” line, and typically case law shows us that of expertise in a certain area is sometimes a valid defense. However, I doubt it will be for much longer and I would never accept a lack of training as an excuse. The tides are turning and agents are being held to an even higher standard.
Let’s look at the mold issue – an agent witnesses green / black furry growth inside the house. They may not know if it’s mold or something else; but since there is a chance that it may be, why not tell the buyer “I’m not sure what that is, but since mold is potentially dangerous and could look like that, you may want to get an inspector in here?”
Saying that you don’t KNOW that its mold, or that it’s potentially dangerous is not a good excuse. If you were preparing a sandwich and saw green spore like stuff on the bread, would you eat it? Hopefully, you would have God given sense and throw out the bread…. but, wait what if it isn’t mold? The point is, you may not know why moldy bread is bad and blue cheese dressing is good, but you’re not going to take a chance.
Customer Service Enforced By The Courts
One recent case Carl Michel vs. Palos Verdes Network Group (Cal. Appls 2nd Dist., Div. 8) found an agent guilty, who went to a listing interview and made notes about issues with the house, but didn’t get the listing. The same agent reportedly assisted an agent in his office by showing that agent’s buyer the home in question, but did not reveal to the buyer the noted material facts from the listing appointment. Since the agent didn’t get the listing in the first place and reportedly had no client relationship to the Seller, therefore no fiduciary duties the duty of disclosure were given to the buyer, as the firm was responsible for his/her protection.
In this case the court did not seem to be concerned about the agent’s level of expertise, solely that they didn’t give the buyer a chance to explore the material issues.
Agents are hired to represent their client’s best interest and to navigate the client through the transaction, all the while looking for the what the client needs or wants. There is a trust factor the buyer has with their agent and all decisions should be made by the agent, as if it were their family buying the real property. This is not only a good business practice bt a fantastic way to reduce liability.
