September 21st, 2012 at 7:12 pm
While it is our goal in the legal department to never have our company and our agents involved in litigation, sometimes it happens. At the end of a trial, a jury will be provided with a series of instructions on how to apply the law. These instructions guide the jury in the deliberation process. While we all know that a real estate broker must disclose to his or her client all material information that the broker knows or could reasonably obtain regarding the property or relating to the property, recently, a separate jury instruction was adopted which is specifically directed at the duty of disclosure by a real estate broker. This instruction states that “the facts that the broker must learn, and the advice and counsel required of the broker, depend on the facts of the transaction, the knowledge and experience of the client, the questions asked by the client, the nature of the property, and the terms of the sale”. The instruction goes on to state that the “broker must place himself/herself in the position of the client and consider the type of information required for the client to make a well-informed decision”.
So does this expand the real estate agent’s duty to disclose beyond what traditionally has been “disclose what you know or reasonably should know”? The simple answer is probably yes because an agent must now consider each client individually and relay information which is fine tuned for that client. In reality, what we are suggesting is that you continue to disclose what you know or should reasonably know by being observant and by thinking would I want to know this fact if I were purchasing this house. Remember if you are questioning whether you should disclose or not, be conservative and disclose it. I can’t recall one case where we were sued for over disclosing.
As always, if you have any questions or comments, please contact the legal department.
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