The courts ordered a seller to pay $216K for failing to disclose known defects in the home. The agent – representing both parties – is also in the cross hairs as the court said the agent and brokerage should also pay damages to the buyer for having breached their fiduciary duty in representing both the buyer and seller as dual agents. This is a perfect example of common events; sellers not accurately disclosing known defects and agents trying to represent both parties when logic (and ethics) clearly suggest this is a very bad idea. As reported on the NAR website:
The Ohio Court of Appeals has upheld a $216,337 jury award levied against a seller who was accused of concealing a home’s defects, and sent the case back to the trial court saying that the seller’s agent and brokerage should also pay damages to the buyer for having breached their fiduciary duty in representing both the buyer and seller as dual agents.
Saleswoman Angela Shanks of Acceleration Enterprises LLC, which does business as Realtec Real Estate, was allegedly given a list of problems identified during an inspection conducted by a prospective buyer. Shanks added a handwritten addendum to a proposed purchase contract detailing problems, including foundation defects.
After that deal fell through, Shanks pointed out repairs that were done to the property to the eventual buyer, but did not discuss all of the defects that had been listed in the addendum. The trial court found Shanks was required to disclose all material adverse facts that she was aware of to the buyer, and that failing to do so constituted a breach of fiduciary duty.
While the takeaways here should be pretty obvious, these issues remain and are fairly common, although not always to this degree. EVERY buyer and seller should have individual representation, it is stupid not to. As sellers will have a listing agent representing them, this information is critical to buyers; there is NO reason to not use a buyer’s agent for a real estate transaction. This includes new homes as well.
As for properly filling out a seller’s disclosure, the best advice is to be honest, complete and accurate. Inspections will be completed and in most cases, issues that are properly disclosed in advance can often be worked through. A real estate contract is a legally binding contract with expectations by both parties, the courts administering a severe penalty to buyers, sellers and or agents when proper protocols are not followed is not only justified, it’s refreshing to see.