March 3rd, 2011 at 10:39 pm
Facts: Just prior to marketing the property an adjoining property owner informed listing agent that she believed the subject property was encroaching on her property. Agent discussed neighbor’s remarks with seller, and seller informed listing agent neighbor was harassing him and that she had no claim for encroachment. Seller and agent, believing neighbor lacked credability, elected not to disclose neighbor’s verbal assertions regarding encroachment. Escrow closes and neighbor sues buyer for injunctive relief/removal of hardscape. Buyer discovers neighbor had informed seller AND listing agent about the encroachment months prior to the close of escrow and failed to disclose the dispute to buyer. Buyer thereafter cross-claims bringing in listing agent and seller. Seller cross-claims against his listing agent claiming he was not advised to disclose the alleged encroachment.
Although there are some defenses here, and even if the neighbor’s action lacks merit, buyer and seller are forced to incur expenses to defend themselves. Being named and involved in an action for intentional concealment is not a positive experience. The moral of this example is: Disclose all facts known despite the credibility of the source or veracity of that information.
Had the agent placed one line in the TDS such as: “Agent informed possible encroachment issue with neighbor in SE corner of property, buyer to satisfy self as to same” seller and agent would likely not have been brought into this action.
Like what you see here? Sign up for more! Our free e-newsletter informs you of listings in your community, insider real estate tips, the latest in home trends, and more.
